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Prediction 5: Palm will not survive the OS wars - 2009 Predictions
If 2008 will be remembered in part by the emergence of Android, Google's open-source platform, into the operating system realm, 2009 will go down as the year the OS wars claimed their first victim, and we predict it will be Palm. Palm plans on introducing its new OS, Nova, at the Consumer Electronics Show, hoping to spark a lot of attention. It's a gamble that won't pay off for a company with a declining product portfolio and weak profits. Although Palm recently secured an $100 million investment from Elevation Partners, we don't think that will be enough to keep the firm in business in the long-term.
In the OS wars to come, every platform will have to have strong backers. Android has all of the members of the Open Handset Alliance, including LG, Samsung and Sony Ericsson. Research In Motion's BlackBerry OS can count on enterprise users around the world to keep it strong. Symbian has the exclusive backing of industry giant Nokia and Apple's proprietary software for the iPhone 3G will continue to garner attention, investment and development. This leaves Palm out in the cold, with no room for error. The pressure will be too much, Nova will arrive too late and Palm will fold as a viable platform.
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Comments
Posted by Q | January 6, 2009 - 1:58pm
I strongly disagree. I believe that Palm will survive in some fashion. Most of the naysaying of recent years argued that Palm wouldn't make it to this sort of announcement. Much of it was based on old information while Palm was making substantial--if not immediately visible--changes.
I agree that it will take more than Elevation's investments to date for Palm to keep going. However, I consider Palm's CES event to be, in part, a showcase for future investment and partnership. They have a lot of stakeholders to satisfy here--carriers, developers, and customers. If they can show something truly groundbreaking, then they strengthen their position considerably. We'll have to see what they show.
And if, in the end, Palm cannot continue as a standalone company, then the best option might be getting purchased to become a subsidiary of the buyer--somewhat like Cisco did with Linksys. Someone to provide funding and integrate Palm's product lines with other complementary products.
If they can find a buyer like that--who will maintain the Palm name, their Nova operating system, and put together a good integration plan, that's still much better than a slice-and-dice acquisition.
I look forward to next year and looking back on this.
Posted by Anonymous | January 20, 2009 - 2:59pm
Looks like you might want to change this one. It looks like you should of waited until after CES before making this prediction.
Posted by Branedy | June 11, 2009 - 4:43pm
That 100 Million investment is now worth more than 1.2 BILLION dollars. That's healthy.
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