Palm's growth plan: Can it work in a changing mobile market?

When Palm announced a new mobile operating system - WebOS - and plans for the first smartphone built on it - the Pre - at the Consumer Electronics Show back in January, the company became the darling of the industry. Here, after all, was the company whose name was once synonymous with mobile computing and it was gearing up for a new offering in the space it helped build. But a funny thing happened in the time between the announcement and the actual delivery of the Palm's new OS and device. Other players in this quickly-getting-crowded space were making announcements of their own, taking some of the steam out of Palm's big splash. Apple's iPhone is still going strong, despite criticisms about its exclusivity with AT&T in the U.S. Research in Motion has enhanced the Blackberry lines with touch screens, sleek designs in fun colors and even a buy-one, get-one-free promo through Verizon. And Google's Android is gearing up for a bigger presence among mobile carriers next year, thanks in part to manufacturers like Motorola, which is basically wagering the turnaround for a struggling handset division on the OS. So where does that leave Palm? On the surface, the company seems to have the right idea. It has a game plan for building a platform around WebOS, delivering on WebOS devices that users will want and developing a marketing strategy to re-spark awareness around its brand. During its quarterly earnings call last week, Palm CEO and chairman John Rubenstein said that success in those areas should "translate into long-term sustainable growth for Palm, enabling us to launch more products with more carriers and expand our reach in new and existing markets." Executives were especially bullish on prospects for growth in the enterprise. Gartner recently placed the Pre in the "appliance level" category and the company enhanced its Microsoft Exchange security policies, signs that the OS and device are OK for the enterprise, executives said. Finally, the company also announced a new two-pronged marketing strategy - one focused on product marketing and brand design. It all sounds good - but Wall Street is still a bit cautious. In a note to investors after Palm's quarterly report last week, Morgan Joseph analyst Ilya Grozovsky speculated that sales with Sprint have slowed - based on the company's unwillingness to break out sales of WebOS devices against legacy products Treo and Centro. Quarter-over-quarter growth is likely, Grozovsky wrote, but "we believe that management's guidance for (the second half of 2010) is overly optimistic." I want to believe in Palm. The company has a history of reinventing itself to get through tough times. Remember the split into palmOne and palmSource and then back to Palm? But it's hard to get past the new competitive landscape in mobile. Rising above the iPhone-Android-Blackberry noise won't be easy but Palm seems to have the right idea: focus the efforts on a solid platforms, marketing the brand and broadening partnerships with other carriers. But as the analysts say - it's all about the execution.

Palm's growth plan: Can it work in a changing mobile market?

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