Canadian VP: Palm Will Survive Competitor’s Moves

The head of Palm Canada insists that rival Motorola Inc.’s recent acquisition of Good Technology Inc. – an important Palm mobile email partner – won’t hurt his company. But industry observers are not as optimistic. "It certainly puts additional pressure on Palm at a time when it can ill afford it," says Carmi Levy, a technology analyst at Info-Tech Research Group.Late last year Motorola acquired Good, a software firm specializing in mobile. Its Good Mobile Messaging system "pushes" emails to handhelds, giving compatible devices the very feature that made Research In Motion Ltd.’s BlackBerry so popular. Palm’s Treo 700 series smartphone received the Good push treatment, helping to make the device a veritable BlackBerry contender.But now that Motorola has purchased Good, some wonder if Palm will continue to benefit from Good’s technology. "I can’t see why long-term Motorola would allow Good to support Palm devices," notes Roberta Fox, a telecom analyst at Fox Group Consulting. Motorola would likely make Good’s technology exclusive to its own handhelds, she says.But Michael Moskowitz, Palm’s VP, Americas International – including Canada – quotes Motorola’s press release on the matter: "Motorola will build upon Good Technology’s customer and carrier relationships by maintaining its multi-device strategy." In other words, Palm and Good will continue to work together."There are a number of partners we’ve had over the years in the email arena that have been acquired or have moved to other platforms," Moskowitz says. "That hasn’t taken away from what we’re doing."Independent OptionAccording to Moskowitz, Palm is staking a claim as the independent option. "We have a number of partners and an open platform." He points out that Palm devices work with RIM email systems, as well as software from Good, Intellisync (acquired by Nokia Corp. in 2006) and Microsoft Corp., which builds push technology into its Exchange email server. Levy says Palm’s strategy has some merit. "There’s probably something to that argument. They’re not bound to any one vendor or standard. But ultimately if you’re a client, you’re going to be making more than one phone call and you’re going to have more than one contract. In this day and age clients want more homogeneous solutions, not heterogeneous ones."Fox echoes that assessment. "Anything that isn’t included in the device – if people have to go and get it, that usually stops them from adopting it."Moskowitz says the independent strategy addresses a geographic fact. "Different partners are strong in different regions." Good is strong in the US, but it’s not as popular in Europe, where Intellisync rules. And Good is not the favourite among Canadians, who prefer Microsoft and RIM systems. Palm can’t afford to put all of its eggs into one email basket, Moskowitz says. Favouring Good over Microsoft or RIM over Intellisync inevitably curtails the device maker’s market in one location or another. "Our strategy has always been about choice."But Fox wonders if it’s time for Palm to buy or build its own mobile email platform. As competitors like Motorola and Nokia consolidate through acquisition – buying Good and Intellisync respectively – Palm ought to even the score. "They’re going to have to develop it or they’re going to have to partner," Fox says.Levy questions Palm’s abilities in either case. "It certainly doesn’t have the cash reserves; it doesn’t have access to the development resources."He predicts another fate for Palm: "It wouldn’t surprise me if 2007 marked the acquisition of Palm by a larger enterprise suitor."Motorola’s Buying SpreePalm’s loner status is made all the more stark by Motorola’s buying spree. Not only has it acquired Good, but it has also bought Symbol Technologies Inc., making that firm’s ruggedized access points, RFID equipment and other enterprise mobility wares part of the Motorola product portfolio. As well, Motorola acquired Tut Systems Inc., which provides video processing technology. Motorola made numerous other acquisitions in 2006. But both Motorola and Palm have struggled financially. Motorola’s net income in Q4 2006, reported last month, was US$624 million, down 48% compared to Q4 2005. The company said it would cut 3,500 jobs to save money. In December Palm’s Q2 2007 numbers showed net income of US$13 million, down from US$261 million a year earlier.Moskowitz says he won’t speculate on the buy-or-build mobile email scenario, but he notes that Palm developed its own email client capable of connecting to numerous email platforms. "We’re really a software company."Palm is trying to better its chances with business users these days. The company started offering Microsoft’s Windows Mobile operating system on its devices for this reason. "Clearly there’s a market that wants Windows Mobile, particularly in business," Moskowitz says. "In my region, we’ve seen some significant increases."But Palm isn’t abandoning the Palm OS, its proprietary operating system. The vendor will distinguish the homespun platform in one way, while developing Windows Mobile in others. "We’ll work to differentiate both to even a greater extent."

Canadian VP: Palm Will Survive Competitor’s Moves

News | February 1, 2007

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