Brand Health Check... Palm must get a grip on new market challenges

The device was the brainchild of Jeff Hawkins, who started Palm Computing in 1992 to develop mobile computers. Palm launched its PDA, the Palm Pilot, in 1996 and, by 1999, had covered over 68 per cent of the global market for handheld devices.

The company has been constantly updating its inventory, introducing Tungsten and Zire, the first $99 handheld device. Both series have since been replaced.

Palm has now stepped into the smartphone market ,with its Treo product line, featuring Windows Mobile software. However, critics have pointed out its lack of popular features such as multi-tasking, GPS and mobile TV, among others.

A cumbersome mini laptop device for reading emails, Foleo, also debuted, but was cancelled without a public release because of a lukewarm response. Palm’s latest Centro device, a low-end smartphone, is facing component shortages from suppliers to meet consumer demand.

But tech issues are the least of the brand’s worries. Palm is facing increasing competition from notable mobile phone makers such as Nokia, HTC and Motorola, which have developed their own smartphones. In terms of adoption, Research In Motion’s Blackberry device is now the weapon of choice for executives for email, while Apple’s iPhone has redefined the handheld device market with its internet and high-tech features.

Palm’s financial report made for gloomy reading at the end of 2007. The company share price had halved and was at its lowest since February 2004. Ten per cent of its staff were made redundant.

“We have experienced quality issues on legacy products that have affected customer satisfaction and driven up warranty costs,” Palm chief executive Ed Colligan says. “While we can’t change the past, we are determined now and in the future to deliver only products that top industry standards for quality.”
Once the master of the handheld device industry, Palm’s product line is finding that it has a lot of catching up to do.

Mark Newton, VP, digital media, Qais Consulting 

Aside from problems pertaining to its supply chain, operating controls, product portfolio and so on, Palm has lost relevance among an audience and market it used to dominate.

Palm is largely seen as a brand past its prime. It needs to re-energise and reconnect with a strong and loyal user base that still exists in pockets. The competitive landscape in Asia-Pacific looks ominous, as Palm faces not only eroding market share in the PDA category, but also competition from BlackBerry, O2, Dopod, HTC and the iPhone.

The opportunity exists for Palm within the online environment. If there is one product category that has yet to see saturation in the Asia-Pacific online space, it is this.

Considering the very people Palm targets are heavy internet users, it confounds me that none of these companies have reached out to users using online, especially when it is there for the taking. Palm needs to leverage pockets of loyal Palm users throughout the region to help them spread the word to non-users. We have seen that word-of-mouth has been reinvigorated by the internet, and brand advocacy is the most powerful resource Palm can tap into to take it to the competition.

Barney Loehnis, network director, Asia, Isobar

I have a lot of affection for Palm, but in a retro kind of way. It strikes me that beyond the development of its original product, it has never been able to match the level of innovation and sustain competitive advantage in a very competitive market. For PDAs and phones, the product is everything.

The brand is always secondary. In this sector, the brand can only be champion when there is a fantastic product behind it and, unfortunately, Palm has not risen to the challenge.

In today’s market, brands are defined more by what they do than what they say they do, so however brilliant the marketers are at Palm, they are at the mercy of their product development team. It’s all too easy for Palm to invest in flashy marketing, but a quick glance at the message boards or review sites will expose the advertising fantasy and hot air of people paid to sell weak product.

Think BlackBerry or Palm: each new model slugs its way towards becoming marginally better than the previous one.

Consumers go weak at the knees when some companies really do step up to the mark to give both consumers and the marketing industry something to celebrate and honour.