Last Updated Apr 8, 2010 1:50 PM EDT
Rubinstein: "Remember this whole thing was a transformation story. It wasn't like we took something that was working and didn't run it well. We started off with a company that had no future, and we have been transforming it."It may be that Palm wasn't operated well. However, here's a 2004-2010 stock chart, via Google (GOOG) Finance, with a brief Palm/Rubinstein time-line superimposed.
Rubinstein: "We do have $590 million in the bank, and we have a plan that carries this company forward."Well, maybe. At the last earnings call, Palm didn't provide a cash burn forecast. Morgan Stanley analyst Ehud Gelblum thought the company would go through a quarter of that money, leaving Palm with maybe a year's worth of cash left.
Rubinstein: "If you start from the very beginning, remember that we launched a first generation operating system. It always takes a while for an OS to mature."Let's see: by the end of its first year of the iPhone OS, Apple (AAPL) sold 5.4 million units. After a year, Google hit a 5.4 million-units-a-quarter pace for Android-based handsets. Last quarter, Palm moved 960,000 smartphones into distribution, but sold only 408K to customers -- down 29 percent from the previous quarter, and down 15 percent year over year. Yeah, new phone operating systems are a bear.
Rubinstein: "With the Verizon (VZN) launch, we did the training for Verizon that we would typically do, and that obviously was insufficient, given that the Verizon salespeople had spent years selling Research in Motion's (RIMM) Blackberry and a tremendous amount of effort and energy training on Droid."If the Verizon focus on the Blackberry and Droid was obvious, why did Palm do what it "would typically do?" Clearly Palm needed to do *more than usual* to make inroads with such a large customer.
Rubinstein: (on the question of whether webOS is a major product differentiator) "Look, webOS, has all the capabilities you'd expect from a world-class smart phone. It does email and messaging. It does Web browsing and video capture. And then it has some things that most don't have: capabilities to share and edit video, and immersive 3D gaming. There's a whole list of things that you'd expect the top tier to have, and we have those all in webOS. Then we have additional things, like real multitasking. So, if you're playing 3D games and you want to go check your calendar or email, you can just switch between tasks and come back to your game."Features are a differentiators only if consumers agree. As Apple has shown (at least up until the iPhone OS 4.0 announcement), multitasking hasn't been that important to most people. And who the devil tries to edit video on a smartphone? (A feature which, by the way, the iPhone OS offers as well.) Rubinstein comes from an engineering background, and that's getting in his way of understanding what really matters to consumers.
Rubinstein: "Our potential pool of developers is bigger, because I think a lot more people know how to develop a Web site then know how to do embedded development for Symbian, for example."Just one problem: Palm isn't selling enough devices to interest developers, so the technical whizbangs simply don't matter. Where customers go, developers will follow. It's as simple as that.
Rubinstein: (when asked what success would look like) "I'm not going to throw out a number, but I think as long as we're growing rapidly, that's what counts, number one. Number two is we really focus on the quality of apps, right?"Number one, growth rates are easy when you aren't selling much to start. Number two, there aren't a whole lot of apps there -- 2,200 by his count -- so I guess it has to be quality over quantity.
Rubinstein: "We ramped up production for the Verizon launch and in anticipation of the Chinese New Year holiday, right, and it's not like we did something weird or stuffed the channel or anything like that."As I've pointed out before, the holiday only lasts for a few days, not the two weeks or so that Palm shut down production. Yup, sure does smell like Rubenstein's dinner included some channel stuffing.
Rubinstein: "I mean, would I rather have a spare billion dollars to go spend on brand advertising around the world? Of course I would."And they would have had a lot more than they do now if someone hadn't signed off on that early ad campaign that gave so many the creeps.
Rubinstein: " Remember that the carriers have something to do with all this too in that they get to pick and choose what products they're going to sell. They want to make sure the customers have choice. As long as we have their support, I think we can succeed. It may take longer than we'd like, but I think we can get there."Yeah, and results with Verizon were bad and AT&T (T) has put things off for a few months. Lots of support there.
Ugh. I'm sure Rubinstein felt he had to promote the company -- and he hoped that it would do something to keep investors from pulling an Oedipus and striking out their own eyes. But as I've said before, Rubinstein isn't getting the job done and he should go.