It appears in early January that Palm will announce their new operating system, devices and direction. It is believed that the new Palm will also be the only Palm operating system used by the company, dropping the old Palm OS and Windows Mobile in favor of this new platform. (They’d keep supporting WinMo for its corporate clients only.)
I’m skeptical that Palm can survive this transition. It isn’t 1996 any more. The mobile market back then had no major players. Palm was able to build every thing without having direct competition. Now all parties — customers, carriers, developers — have huge expectations. And there may be too much history with all three for Palm to woo them back into the fold. A brief explanation for each:
Customers
Customers have spent the past six years hearing how Palm is bringing out their next operating system. Most seem to have migrated to Windows Mobile, BlackBerry and iPhone at this point. Let’s face it, the Palm OS is antiquated, looking and feeling like yesterday’s technology. And with the company on the ropes financially, there is a big dis-incentive to acquire one of their devices.
Apple was in a similar situation when Palm was coming into existence ten years ago. Apple, though, had a legendary founder back in the fold and a new deal struck with Microsoft to ensure its survival. Palm will need some similar move to live through this one.
Carriers
There’s an interesting alignment occurring among the carriers here in the States. Exclusives are all the rage. Apple partnered with AT&T, RIM launched its BlackBerry Storm exclusively with Verizon, and Google launched Android exclusively with T-Mobile. On the surface we are returning to a world where if you want a certain device you have to switch carriers to get it.
It makes sense for carriers and companies to partner like this, of course, as developing hardware for one specific carrier platform is a lot more efficient than doing it for all of them. And the carriers can push one major product, differentiating themselves from everyone else. But if this trend holds true, it also has the effect of locking out new participants in the market. Where does Palm go? Sprint, a distant number four in the carrier races? Well… they did with the Centro. But this doesn’t necessarily get them the exposure they need to be successful. And what happens when Nokia comes calling? Does Palm get back-burnered for the next latest and greatest? It’s a vicious cycle: Palm comes out on a smaller carrier, doesn’t get huge sales, the carrier then feels they wasted time and money and doesn’t promote the product, which then supresses sales even further.
Developers
Excuse my bluntness, but Palm screwed their developer community. In 1999-2000, Palm used to talk in terms of the Palm Economy. But when the chips were down rather than doubling down on its community, the company decided it was easy enough to make a quick buck off of us. Palm, who spent years wooing developers to its vertical markets, suddenly dropped those vertical markets leaving its developers to hold the bag. Resellers went from charging 20-30% of each product sold in 2000 to 65-70% in 2008 (for reference, the world’s largest online reseller Amazon charges 25% and holds physical inventory). In addition, they added restrictions on what we could do with customer information and required our own web sites to be removed from our products, meaning we had to develop a special version of our software for each reseller.
There are great alternatives out there now on other platforms. With Apple, RIM, Google, Microsoft and others, there is a direct marketing channel (or soon will be) that reduces our support costs by eliminating installation issues and charges a reasonable 20-30% of our retail price.
Given that, all will be forgiven if Palm can sell enough devices. At the end of the day, developers will gravitate toward any platform that sells lots of units and makes it reasonable for us to sell our wares.
But with the markets working against them on all three fronts, it will be quite a challenge to do so. If nothing else, Palm will have an intellectual asset that could be a catalyst for company acquisition. A year ago, with one outdated operating system and another licensed, Palm had nothing to sell. At least now, it might.
We’ll all find out the first week of January.
Elia Insider 
From a developer perspective, I think you’ve definitely got it right–if the numbers are there, devs will come. But since Nova will most likely not be backward compatible, Palm starts at Day1 in regards to wooing devs to the platform. With alternate choices of offerings from Apple, Google, Microsoft, RIM, and Nokia, will Palm be able to generate enough volume to attract enough devs to support its new platform???
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I came to the Palm game a bit late in 2003. I formed a company and we developed several games over the next 2 years. Then everything you described happened. We were on our way to being a very successful company until the percentages changed. I cannot see Palm wooing back developers if the ROI is not there. We are developing for the iPhone with their attractive 70 / 30 split. Additionally, the tools thus far and the process from Apple have been good. Unlike the Palm playground where I spend wasted hours learning the new rules. I still love the idea of the Palm and I think they got so much right. I wish them the best.
Great Post! I came to Palm in 1997 with the Palm III a great device that really changed the way I managed my information. I say great because it gave me indispensable was access to email and of course my FC Plus! I had no idea and paid little attention to what the OS was. Very few “normal user” (not SUPER users like many of you guys) buys a PIM or now a Phone for the OS – end users don’t really know or care what OS something runs. End Users like simplicity and APPLICATIONS. After following your blog for the last year I have come to the conclusion that there is a limit to how many OS developers can financially support (I am not a developer nor do I play one on TV). There appear to be too many ladies at this dance. Palm has always been a pain to deal with. I HATED installing apps on my Palm devices, it was confusing and cumbersome. There were a lot of them but I didn’t look through many of them because I wasn’t sure I could get them installed and working. One piece of info I would be interested in is as a developer whose SDK (if I am using this term right) is better, and who gives the best support? RIM, APPLE, NOKIA, SYMBIAN, PALM? I know from experience after using a Crackberry for years and switching to the iPhone recently the iPhone is WAY easier to use than the RIM software and its’ integration with my phone and Mac is superb. Hated the keyboard at first but now type faster on it than I did on my BB.
Palm was dead to me 5 years ago. I carried a palm handheld just to power my calculator, and when it died I was not going to buy another. This mobile OS war is far from over but I can tell you who will win – it will be the company that has the most applications, best hardware, and makes it very simple to use…hmmm sound like any company named after fruit we all love????