Background – Today Palm announces the first major operator partner for its European strategy with an O2 partnership.
Back in January, when Palm unveiled the Palm Pre and its new Web OS platform, Palm's innovation was clearly differentiated and ahead of the competition. Palm had pulled a rabbit from the hat. The Pre integrated social networks with its 'Synergy' interface in an extremely modern overall touch user interface. The hardware was different too: The Pre offered wire-free charging with the add-on Touchstone and managed to combine both a capacitive (multi)touch screen with a QWERTY keyboard in a phone the same size as the iPhone.
Nine months is a long time in mobile.
Now, most of the key Internet phone makers have launched social network integration (most notably Motorola with Motoblur on the Cliq/Dext; HTC's Sense UI on Android and Windows Mobile; and INQ Mobile's various models; and others about to announce plus operators). Offering a capacitive touch screen is now table stakes for a high end Internet phone.
Palm's product strategy was smart when put in place several years ago. Unfortunately, others thought the same way. This is a key challenge for developing a product strategy that takes several years to move from inception to launch. How do you stay ahead of the game when you're stuck behind the fog of the product strategy war? (It's a great reason to use research firms to develop that strategy).
Now, Palm does retain differentiation, but mostly in how the Palm Pre does what it does. Palm has to work hard to communicate that its execution is different.
Today's announcement of an exclusive deal with O2 in various European countries will help. As a small firm, with a new launch product, Palm will benefit from the co-marketing support to evangelize its product differentiation.
Palm's other key challenge is how to maintain the r&d spend needed to ensure its next products are more innovative than its much larger competitors, while shipping significantly less handsets than any of them every quarter.
For more insights into why so many firms are integrating social computing and social networking into mobile handsets, see this report: How Mobile Handsets Will Deliver 24×7 Social Computing.
For analysis of the Internet phone category and how Palm compares with the other handset makers please read this key report: The "Smartphone" Is Dead: Long Live Smart Phones And Smart Gadgets