Thursday, October 9, 2008

End of the Palm PDA Era?










Kris Keilhack over at PalmInfoCenter.com has an interesting article posted called "New Palm Accessory EOL Notifications."
"After several quiet weeks following the launch of the new Treo Pro, Palm's Channel Source ResellerPro portal has posted a few tidbits of information regarding product EOL status as well as Palm's new Education Purchase program.

After being announced barely five weeks ago, Palm has unsurprisingly decided to EOL one of the Treo 800w's Palm-branded peripherals. The 3291WW Vehicle Power Adapter with micro USB plug has received its EOL notification. We covered this item's release back in late August and discussed the unnecessarily overlapping SKUs . Presumably, Palm will be updating their remaining micro USB car charger, 3437WW, to reflect its compatibility with the new Treo Pro as well as the older 800w."

Read the full PalmInfoCenter article...

Interesting. So Palm is going to be refreshing some accessories as we head into the holiday shopping season. In and of itself, that information is not surprising.

However, I have to wonder about the graphic (above) and the announcement that the educational purchase program is changing. In the past, the education purchase program favored Palm's traditional handheld devices like the Palm Tungsten E2 and TX. Is the changing of the educational purchase program the early warning sign that Palm's PDA business will finally be coming to an end at the end of this year?

During the most recent conference call, Palm CFO Andy Brown reported that "[Palm] saw handheld sell-though fall to 166,000 units representing a 49% decline year over year and as we
look ahead, [Palm] expect[s] this trend to continue. Inventory held by our channel partners was 7.5 weeks at the end of the quarter. "

About a year ago, on a similar quarterly conference call, Palm referred to their PDA business as a jet liner coming in for a soft landing. From last months sales and inventory figures, and this months EOL activity, it would seem like it is just about time to turn off the fasten seat belts sign.

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2 Comments:

Anonymous Luke said...

I don't see how Palm is counting a fall in PDA sales a reason to quit making them. They haven't done a refresh in 3 years, nor updated the software since then. I should think when you do that poor of a job keeping up your PDA business you'd expect the sales to drop.

October 11, 2008 4:37 AM  
Blogger Alan Grassia, Staff Writer said...

This is more about a business decision. How many other companies are still making PDAs today? It's just Palm and HP.

Palm has decided that they want to be a smartphone company. Things like the PDA and the Foleo are distractions. The only reason why Palm is still selling PDAs is because it has been profitable for them to do so. The PDA business has essentially been on auto-pilot for the last two years.

I believe that Palm will stop selling non-smartphone devices when the profit drops below the cost to build them.

Alan G

October 11, 2008 11:12 AM  

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