Archive for the ‘Palm’ Category

Why I Don’t Have a Palm Pre Yet

Tuesday, June 16th, 2009

June 6th was the launch date for the Palm Pre, the heavily hyped new smartphone from Palm and Sprint.  What I really want in a phone is something that matches the elegance and simplicity of the user interface on Apple’s iPhone, but still includes a physical keyboard and multitasking capabilities.  The Pre appears to be a very close fit, almost certainly much better than the Windows-mobile based HTC Touch Pro that I bought last year.

I definitely tend to be an early-adopter on new gadgets, so it certainly wouldn’t have been surprising if I had run out to buy a Pre last weekend.  In fact, I would have very much liked to have made that purchase.  Unfortunately, I’m already a Sprint customer and, as I mentioned earlier, I purchased a new phone last year.  Because of this, I am not currently eligible for upgrade pricing, which means that any phone purchased now would cost me considerably higher than the new or upgrade eligible customer pricing, which, of course, is the pricing that Sprint and Palm are advertising publicly.

I am, of course, under a 2-year contract with Sprint that was a necessary condition for the purchase of my last phone.  I completely recognize the validity and legality of that contract and that it is the underlying reason why I am not eligible for upgrading without a price penalty.  My purpose in this post is not to argue that my situation is somehow unfair or that I am being denied an entitlement.  I never had any expectation of being able to upgrade early and I don’t believe that there is anything unethical, much less illegal, about the system.

What I do question pretty strongly is whether or not the current business model used by the cell phone industry is a correct one in today’s marketplace.  Particularly since Apple has turned the smartphone into a much more mainstream product with the iPhone, the industry has entered a phase of extremely rapid growth and enhanced competition with frequent introduction of new models with desirable new features.  I strongly question whether customers are going to continue to be willing to accept a system that requires a 2 year wait between upgrades.

I had initially started thinking about this as subject for a blog post after getting into a Twitter discussion of it during the day of the Pre launch.  I got busy with other things and didn’t find time to start working on it until later.  In the meantime, this became a very hot subject generating a lot of coverage both in blogs and the mainstream press after Apple announced the third-generation version of the iPhone and AT&T revealed that the lower pricing would not be available to current iPhone owners that are still under contract.  This is a change from the approach taken with the last version of the iPhone, which was offered at the new-customer price to owners of the previous version, regardless of contract status.

The central idea behind current business model used by the cell phone industry is that the carriers subsidize a portion of the purchase price for the phone in exchange for the customer committing to a service contract, generally for 2 years.  If the customer chooses to switch carriers before the contract is up, he/she is obligated to pay a fairly substantial fee to buy out the contract.  Most carriers offer the customer the option of a smaller discount on an a new phone half way through the contract.  After the contract expires, the customer is generally eligible to again get the same subsidy offered to a new subscriber.

The contract system eliminates a lot of the need for carriers to expend much effort in customer retention, outside of the discounted phones offered at the end of the contract.  This likely saves the companies a lot of money, but is also almost certainly the biggest contributor to the industry’s reputation for poor customer service.  I have found that no matter which of the big cell phone carriers is mentioned, it doesn’t take long for someone to start telling stories about their horrible experiences.

It is in the best interest of the cellular carriers for most phones to have non-subsidized prices that are prohibitively high for most people since, otherwise, it is a safe bet that most people would forgo the contract.  This would make it much easier for customers to switch carriers at will and, thus, would greatly increase the cost and effort that the companies would have to expend towards retention.  I have little doubt that this would dramatically improve the quality of the customer experience, but it might or might not have a negative impact on profitability.

The big question is whether or not the non-subsidized prices really reflect the true cost of a cell phone or if they are kept artificially inflated by the cell phone manufacturers as a result of the subsidy-based sales model.  I admit that I have no direct knowledge, but my educated speculation is that the subsidized prices are probably more realistic.  The non-subsidized prices for phones (especially smartphones) simply seem way out of proportion with the pricing for other portable electronics.  In most cases, those prices are pretty close to what you would pay for a full-featured laptop computer and considerably higher than netbooks, stand-alone PDAs, or portable media players, any of which would seem more comparable technology.

The most obvious direct comparison would really be between the iPhone and the iPod Touch, which is basically an iPhone without the cellular radio or camera.  The pricing information for the 16GB version of the new iPhone 3GS has indicated that it costs $199 fully-subsidized (the price widely advertised), $399 for customers 1-year into their 2-year contract, or $599 un-subsidized.  The suggested retail price of the 16GB iPod Touch is $299 and it can be found in the $260-$275 range if you shop around.  I can certainly see where the added features of the iPhone would justify a higher price, but does it really make sense that they would double it?

In all fairness, my instinct looking at those numbers is that the $399 price offered after 1-year is probably the most realistic one.  While I suspect the price on the iPod Touch is also a bit inflated (it doesn’t really have direct competitors), it really does look like the $199 price probably brings in a pretty thin profit margin, if there is any at all.  The same is probably true with the similarly priced Palm Pre, although it does also have somewhat lighter specs, including only 8GB of memory. Even if the subsidies do push the prices down below the actual cost of the phone, I can still see justification for why the carriers might want to subsidize even for existing customers still under contract in order to prolong their contract and help to ensure loyalty.

I think that they might want to look to the satellite TV business as a possible example.  I’ve been a DirecTV customer for a number of years and they also use a system of contracts and subsidized equipment.  The big difference from the cellular business, though, is that DirecTV lets current customers upgrade their equipment (such as going to a DVR or hi-definition) at the fully subsidized price no matter how far they are into a contract.  The one catch is that doing so will reset their contractual start date to the date of the upgrade.  This helps to accommodate any need that the customer might have to move up to something better or different, while also pushing further back the date at which he/she might be able to switch to a competitor.

I do imagine that the cellular industry would probably prefer to stick with the current fairly customer-unfriendly system for as long as possible, but I do seem some recent signs that they may very well be changing their approach.  The recent publicity over AT&T’s prices for iPhone upgrades hasn’t been very good for them, even if they are pretty clearly within their rights.  A fan base as loyal as the more vocal iPhone owners, particularly when they are so willing to spend more money to make sure they have the latest and greatest, really does need to be cultivated and protected.  Policies that seem to directly target those loyal customers may not be in the company’s best interest, even if they appear to be the most financially prudent on the surface.

Another interesting development is Sprint’s recent introduction of the Sprint Premier loyalty program.  Customers that have achieved high longevity (10 years or more) or have one of the higher-end service plans (priced over $69.99/month, a fairly common price point for a smartphone with both a voice and data plan) are automatically enrolled in that program.  While the program offers a number of smaller benefits, the big one is that those customers are eligible for the fully-subsidized upgrade price at the end of the first year of a 2-year contract.  While Sprint’s recent issues with customer retention probably made this more necessary for them, it still is a pretty clear acknowledgement that higher-end customers are increasingly unwilling to wait 2 years between upgrades.

My Inventory of Computer Equipment

Tuesday, August 26th, 2008

I figure this is a good time to give an inventory of my home computer equipment.  I’m only listing personal stuff here, not my work computers.  I’m also only listing the items that are in active use currently.  We have quite a bit of older equipment in closets or on shelves around here as well.

1. Home-built Desktop PC: I haven’t purchased a desktop computer for over 10-years.  Instead, I build my own system from individual parts, occasionally upgrading when the pricing and my needs dictate.  My current system has an Intel 2.13GHz Core 2 Duo processor, 3GB of memory, 1.5TB of hard disk space (spread across 4 drives), NVIDIA GeForce 8600 GTS video card, and a Creative SoundBlaster X-Fi sound card.  The OS is Windows Vista Ultimate 64-Bit.

2. Vye S37: This is my every-day laptop.  It is a mini-tablet UMPC with a 7-inch touch-screen, a nearly full-sized keyboard, 250GB hard drive, and 2GB of RAM.  It is running Windows Vista Ultimate 32-bit.  I’ve written several previous articles about this device on the previous version of this blog.

3. Apple MacBook: This is primarily my wife’s laptop computer, although I do use it occasionally as well.  This is the newest computer in our collection, having just purchased it a few weeks ago after the power supply died on her old HP laptop.  I’ve never been a big fan of the Mac OS, but we felt that it might fit my wife’s needs much better than Windows.  So far, she has been very happy with it.

4. HP EX470 MediaSmart Home Server: This unit is our primary backup and centralized file storage device.  We also use it as a media server.  This system runs Microsoft’s Windows Home Server OS and I have upgraded it from its stock configuration of 500GB hard disk space and 256MB of RAM to 2.25TB of hard disk storage and 2GB of RAM.

5. Palm Treo 700P (Sprint): My current cell-phone/PDA is the latest in a series of Palm OS devices that I have owned.  I am nearing the end of my current contract with Sprint and will be eligible for the best upgrade rates on a new phone starting September 1.  I’m starting to evaluate options for new phones (a topic for another article) and probably am ready to finally move away from the Palm OS.

6. Sony Playstation 3: Although I do use the PS3 for some game playing, it was actually purchased primarily because it is generally the best currently available choice for a Blu-Ray video player.  The PS3 is located in the upstairs bedroom and is also used to stream music up there from the home server.

7. HP OfficeJet 7410: This is an "all-in-one" color ink-jet printer that also works as a scanner, copier, and fax machine.  A big motivator for purchasing this particular printer was that it has built-in wi-fi networking.  That let us put the printer up in the bedroom (out of easy reach of our preschooler) and still send print jobs to it from the desktop computer downstairs as well as from any of the laptops.  While it is now a somewhat older, discontinued model, it still works pretty well for us.

8. D-Link DIR-655: This router is the centralized networking device for our home network.  It is a fairly new wireless router that includes draft 802.11n high-speed networking.  The desktop PC and home server are both directly connected to the router, while the laptops, PS3, printer, and our DirecTV HD-DVR are all set up to connect to it wirelessly.  The router is connected to a DSL modem with service from DSL Extreme with 6000/768Kbps download/upload speeds.

The Future of Palm

Monday, November 5th, 2007

As I’ve mentioned before on this site, I have been a long-time user of Palm OS devices, starting with the Palm V PDA and going all the way up to my current Palm Treo 700p smartphone.  I have a great deal invested in Palm OS software as well as the high comfort level that comes from extensive experience, which makes me very hesitant to move on to another system.

I know find myself very seriously considering just such a move.  The current version of the Palm OS (or "Garnet" as it is now called) is getting very long in the tooth and I’m increasingly coming across applications that I simply can’t get on that platform.  I’m becoming very envious of applications like the mobile versions of Newsgator, OneNote, Opera, and others that are available on other platforms, but not on the Palm.  Such basic functionality as true multitasking or support for wifi and cellular networking on the same device is also becoming conspicuous in absence.

Like many Palm OS users, I’ve long been waiting for a next generation of the OS to come along, but without seeing it materialize.  In recent months, Palm has promised that they are preparing a substantial upgrade to the OS which will shift it to a Linux kernel.  We have seen similar promises from Access, which bought out Palmsource (the OS development spin-off from Palm) a while back.  Those hopes appear to again be getting dashed, though, as Palm is now promising a mid-2009 launch for their updated OS and Access doesn’t seem to be generating any interest in the US for their system.

Clearly, mid-2009 is a very long time in a rapid-growth industry.  By that time, the current leaders in the smartphone industry such as Windows Mobile and Symbian will have continued to advance with new features, devices, and refined user-interfaces.  Apple is also expected to open up the iPhone to 3rd-party developers in early 2008 and it is also pretty likely that they will put out a second-generation device some time next year.  Finally, Google announced today their Android operating system and mobile software platform, which should start to appear on devices towards the end of 2008.  With all that on its way, I suspect that a very large percentage of current Palm OS device users will have moved on to a different platform by the time Palm’s new OS is ready in 2009.

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Palm’s Future Mobile Managers and the UMPC

Friday, May 5th, 2006

Originally published 3/21/06 on Bigbeaks Blog

Since the recent announcement of Microsoft’s new standards and software for what they call an Ultra-mobile PC (UMPC), which I discussed in an earlier post, there has been a fair amount of speculation in the online Palm OS user community about what this means for the future of the Mobile Manager line. I touched on this topic a bit in my previous essay, but I thought the subject deserved a more lengthy discussion.

A recent editorial by Ed Hardy at 1src.com focused quite a bit on steps that Palm could take to make the Mobile Manager line more of a direct alternative to a UMPC. I think he is largely coming at this from the wrong angle. Instead of focusing on how to compete with the UMPC as a PDA, I think that Palm needs to understand that Microsoft’s announcement essentially validates the whole concept that Palm introduced with the Mobile Managers. Instead of trying to present the LifeDrive and its successors as alternatives to the UMPC, Palm should work to help the public understand that they are versions of the same idea. If Palm intends to continue with the Mobile Manager line, within a year or so I would expect them to be able to do essentially anything that a UMPC can do.

In the short term, I do think Palm is reasonably well positioned to bill the LifeDrive as a stepping stone to a more full-featured UMPC or future Mobile Manager. Current reports are indicating that the first round of UMPCs to come out will likely be priced around $1,000 or higher. With the LifeDrive’s recent price reduction to $400 suggested retail, it clearly is a substantially lower priced option. If the price reduction is foretelling an upcoming LifeDrive-2 that will offer increased storage and, hopefully, improved performance and stability with a cost that is still around half the price of the early UMPCs, they should find that there is still a market for the product, at least for another year or so. I think the key will be not to promote the devices as a more capable option than a UMPC, but instead as a way to get much of the power of a UMPC in a less-expensive and smaller package.

It is very likely that the second-generation UMPC models will see the prices coming down substantially. Based on the goals that Microsoft has discussed, it appears likely that the price gap between the current price category for the Mobile Managers and the expected pricing for the next UMPCs will be much smaller. I think it is pretty clear that any device running the current Palm OS Garnett is likely to be so substantially reduced in capability compared to a UMPC running a full version of Windows (likely Windows Vista in the second-generation models), that the extra cost of the UMPC will be pretty easy for most people looking for this kind of device to justify.

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