Just to be clear: Palm is not expecting every first-generation iPhone user to magically dump the Apple device for a Palm Pre when it's released later this year, as investor Roger McNamee suggested in an interview with Bloomberg. Likewise, the company isn't saying how much faster - if at all - the Pre will be than the iPhone.
In fact, so much of what McNamee, founder of investment firm Elevation Partners, said was untrue, misleading or exaggerated that Palm felt it necessary to file a "Free Writing Prospectus" with the Securities and Exchange Commission to clarify the company's position. Palm is "by far" Elevation's largest investment. In December, the firm agreed to up its stake in Palm from 25 percent to 39 percent, a $100 million investment. The next month, Palm announced the Pre and a new OS at the Consumer Electronics Show in Las Vegas.
In the Bloomberg reports - which were televised, broadcast over the Internet and written about - McNamee made claims about the performance and demand for the Palm Pre smartphone, the state of the mobile phone industry and the technology that's being used.
The prospectus filed with the SEC, orginally reported on the AllThingsD Digital Daily blog, highlights ten statements by McNamee that needed to be clarified or withdrawn. Among the items:
- With respect to the statements in the tenth paragraph of the transcript that the Palm Pre is “going to be a million times – well, not a million times – several times faster” than Apple, Inc.’s iPhone products and is “going to run rings around them on the web,” the Palm Pre is still under development and it is premature to state the speed at which the device accesses the web or the relative speed of the Palm Pre compared to the smartphone products of competitors.
- With respect to the statements in the twelfth paragraph of the transcript that “there are aspects of the Pre that are unlike any phone you’ve every seen before,” “the Pre is the first one that is the next generation” and “the result is it does a lot of things the others guys don’t do,” the Palm Pre is designed to be the first phone based on the Palm webOS™ platform and as a result will have different operating characteristics and features than other phones, however; the Palm Pre is still under development and it is premature to compare its full functionality with that of other phones.
- The statement in the second paragraph of the article that “not one” person who bought an Apple, Inc. iPhone on the first shipment date “will still be using an iPhone a month” after the two-year anniversary of that day is an exaggerated prediction of consumer behavior pattern and is withdrawn.
The SEC filing was submitted on behalf of Palm, Elevation Partners, and Elevation Employees Side Fund. The wording below is the legal language in the filing that makes it clear that Palm is not supporting McNamee's claims about their products or technology:
The interview and article published by Bloomberg were not prepared by or reviewed by Palm prior their broadcasting and publication. [sic] Bloomberg is not affiliated with either Palm or Elevation. Neither Palm nor Elevation made any payment or gave any consideration to Bloomberg in connection with the broadcast of the interview described here or any other article or broadcast published by it concerning Palm. Statements in the interview or article that are not made directly by Mr. McNamee represent Bloomberg's or others' opinions, and are not endorsed by Palm or Elevation.