In a rather surprising move considering Verizon’s lack of compelling handsets, the nation’s biggest wireless carrier has decided it’s going to pass on the Palm Pre, if reports are to be believed. This is a serious blow to Palm’s aspirations, and their stock took a 5% hit as if to rubber-stamp it. Although the team here is divided over Palm’s new efforts (and advertising strategy), I think we were all secretly rooting for Palm just a bit. After all, WebOS is impressive and the Pre and Pixi are solid little devices — but Verizon doesn’t think so, or at least not anymore.
Nobody can deny that sales have been underwhelming — half a million is about where I’d place them, which is no way to launch a giant-killer. That’s Verizon’s first complaint, and you can’t really blame them. Okay, strike one.
Verizon is also revamping its VCast system and launching its own app store. I’m of the opinion that this store will be a piece of garbage, but I’d understand if they don’t share my outlook. And garbage or not, it’d still be in conflict with Palm’s own app store. Steeerike two.
Lastly, it seems like the true sleeper phone is awakening, and Verizon wants to get on board before that ship sails — instead of being late to the party like it’s been with, you know, everything else. The CLIQ is an interesting phone, and Motorola is a proven partner. And they too know the sting of being hopelessly out of date. It kind of reminds me of Grumpy Old Men, except in this case the crusty invalids are major corporations, joining forces to rejuvenate their sagging sales. I smell a remake! Strike three, and a foul on me for making that reference.
One reason not mentioned: Could Verizon be secretly waiting on the iPhone? It’s a fun thought, but I’d say no way. AT&T has barely been able to cope with the strain of a network full of iPhones, and Verizon would probably break. It’s also an expensive move, and Verizon’s always been about selling medium-sized services to cheap phones. That may have to change, but they’ll ramp up before they go all out.
What this means for Palm will be determined by how they roll with it, and whether they’ve got anything else up their collective sleeve. It’s certainly not good news, in fact I’d say it’s probably the worst news possible short of a meteor striking Palm’s HQ, but don’t go picking out a coffin just yet.
Update: Looks like the Street’s report was in error, or so some analysts would have us believe. Man, after I wrote all that up and made that graphic?!
Is Verizon hoping for an iPhone?
That was my immediate thought, but that would probably be an EXTREMELY expensive move.
Added a little piece onto the post about that.
I don’t think Apple is going to make a 4G compatible iPhone until 2012, so I doubt the rejection of the Pre is based on this issue. I think a big reason Verizon is turning down the Pre is because they know Palm is making stupid decisions. Example: Not including their own software to sync with the Pre with a PC.
Why did Palm advertise that a competitor’s software solution (Apple’s iTunes) would work with their product when they had no agreement in place – and then they bitch about Apple cutting off their access? In addition to their very poor marketing strategy, their 20% return rate is nearly double that of other smart phones and this is what is keeping Verizon from supplying the Pre to their customers.
No way – it wouldn’t be in-line with Verizon’s strict company policy of “No Cool Phones”.
there was also talk about Verizon carrying 3G support for the Apple Tablet.
While supporting the iPhone would be an expensive proposition, upgrading its 3G/4G coverage is something Verizon’s going to have to do at one point or another.
and lets face it… put the best phone with the best coverage and you’ve got one hell of a selling point there.
There’s two reasons people stay away from the iphone on AT&T… the cost and the coverage. If Verizon can just offer better coverage, they’ll move a ton of these.
AT&T’s made a ridiculous amount of $ off the iPhone… there’s no doubt about it. Verizon wants a piece of that pie, one way or another.
Actually, turning down the Pre has a possibility of being very profitable for Verizon, but it’s illegal.
Right now, Verizon is still quite sad that they turned down Apple when Apple first approached them so many years ago when Cingular was still in the picture. It sees the iPhone as a monster-seller that is guaranteed profit when it comes to Verizon, as a means to bring back customers who hemorrhaged to AT&T because of the iPhone, and retain existing ones. At the same time, Apple sees the Pre, which right now is locked down to Sprint and its comparably tiny user base, and sees a potential competitor if Palm ever stopped being exclusive with Sprint. So, Apple goes to Verizon and threatens Verizon to sign a new exclusivity deal with AT&T if Verizon doesn’t turn down new Palm products – and then Verizon just needs to do the math.
Hopefully the SEC will look a little farther than the App Store at Apple, because Verizon turning down the Pre makes absolutely no sense. It doesn’t have to retrofit its infrastructure to accommodate the Pre, doesn’t have to devote almost anything by way of engineering resources, all it has to do is make it available at their retail stores and kiosks which already have a massive amount of shelf space and a ridiculous number of phones on the floor to confuse customers. The amount of money spent training sales associates is a joke compared to the revenue the Pre would bring in.
Something smells fishy here for sure.
i`ve been with verizon for almost two dcades,all my calls get through and never end early,what they need to do is find a company that can make them a futuristic phone, with a clear case, a phone that kicks at&t`s ass.verizon is a money grubbing company, that`s the only thing I dislike about them.
hmm thats a good question.
I hope so…
There is world out there Palm. If not Verizon there is always an option.
They are definitely hoping for an iPhone. I am definitely hoping that the iPhone goes to more than just Verizon.
Palm is definitely hoping that someone out there wants the Pre.
Sorry Palm!
This is rather sad. I mean I feel bad for Palm. They probable had their hopes high and then, got a hollo point right in their eye. It is not over for palm though, they still have a small sliver of a chance. Personally Palm would have to pay me, and a hefty sum for me to use a palm rather then the iPhone.
Hey Guys,
There is an interesting event at Stanford GSB on Oct 20 about Mobile Payments, thought it might interest some of you here.
Check it out http://www.vlab.org/article.html?aid=283
Verizon is a terrible, terrible company. I had the misfortune of dealing with these dickwads for over a year and it was definitely the worst experience i ever had with any company. when theyre not trying to screw you out of money theyre out trying to screw you out of minutes. Not to mention the laughable phone selection (which explains why they are not interested in the pre.) plus dont forget the Bastardization of ui on every single of their phones.
I’ve been using them for 8 years. I switched to various other providers a few times throughout those 8 years, but in the end, Verizon may be shit, but they’re still the shiniest turd out of them all.
And they only “bastardize” the UI of their regular phone, they almost always stay away from the smart phones. They’re getting better with that kind of stuff every year too.
It seems like everyone who hates Verizon, hasn’t seriously used them recently. Its always “a couple years ago”. I’m totally serious here, they’ve come a long way. They’ve HAD to with all that iPhone competition and their horrible selection of phones.
I’ve been with Verizon for five years now. They are getting better at a snails pace. I do not get how they plan to attract new customers at this rate.
They shouldn’t be turning away good phones right now, but opening their doors. The iPhone has been out for how long now and the only thing Verizon has been able to throw at it was the Storm? No way is that even close to an honest effort at keeping up and keeping people happy.
Having been a former Pre owner I must say that I personally did not like the phone but that does not mean that others won’t like it. I think one of the biggest thing that people fail to really look at when analyzing the Pre’s numbers is that it is exclusive to Sprint. I am sure the sales numbers would be larger if it was available on more networks. All in all I don’t think that the Pre has enough power to get loyal Verizon customers to switch to Sprint just for that device….The iPhone however does.
Hmm, I kinda don’t blame them. I’ve been using the Pre for awhile and it’s not a great phone. I know it’s easy for everyone to point out the flaws in a product but after switching from G1 to iPhone to Pre to Touch, the Pre just really doesn’t compare. It’s a bit awkward and slow to respond. It is pretty though and I don’t mind the “mirror” on the back of the screen when the phone is flipped up. Hell, I’d choose an iPhone over a Pre at this point.
How can you not blame them? You can’t deny that the Pre is a more appealing device that any that Verizon currently has, or is planning to carry in the next 12 months.
Even if you like the iPhone or Android phones better than the Pre, you have to remember that the iPhone will never be on Verizon (certainly not until after the 4G transition), and there also aren’t any plans for Android phones on Verizon, either. So what are Verizon customers supposed to do, continue to suffer with Blackberry Storms and dumbphones?
Every time people see my Pre, they say, “I can’t wait to get one. When is it coming to Verizon?” Now, I can definitively tell people, “If you ever want a decent smartphone, Pre or otherwise, you’re going to have to leave Verizon.”
I thought they were rumored to be getting some android phone sometime soon. They’re launching something in October according to the stuff that has been leaked.
verizon sucks thats y i left them for sprint
Me too fresh..70 for unlimited cellphone mins, can’t do better than that
Step in if you disagree, but there is a very sharp blade on the bottom of this sword as well. If Palm were to break from Verizon (which they have apparently done) and enter into non-exclusive carrier friendly deals with all the major names (Tmobile, Verizon At&T..etc), they could very easily position themselves as the anti-Apple.
By crafting an image that takes peoples right to exercise their choice of phone service while not being limited to specific devices, they jump on the growing “anti-Apple closed door policy bandwagon.”
There are not many choices out there for good smart phones (The New Balckberries Tour and Curve, iPhone and the Pre) and they are all tied to exclusive deals.
In the short term they may lose money per unit on phone sales, but reestablishing themselves as a market leader both boosts credibility and offer biz dev opportunities in the large scale adoption of your OS.
Buck the trend Palm! Thats what made Apple sexy in the beginning!
Give the carriers the phones for free if you have to!
you’re a moron.
SHORT Palm now, you can make easy money!
Not sure the 5% slide is because of this news. The market as a whole was pretty shaky today.
It’s always hard to divine the reason a stock went down on any particular day, but in this case, about half of Palm’s decline seems to be due to the Verizon announcement. The stock was consistently down by about 2% for most of the day, then plunged a couple minutes after the announcement was made.
Figures. It seems like Verizon just loves to pass on things their customers want.
How much of the underwhelming Pre sales numbers can be attributed to the Sprint exclusivity deal? I’d say it’s the major factor.
Agreed. Either:
1) Most people are going to be locked into their current contracts
2) People can’t afford $70+ per month for a smartphone contract
3) People are off a contract but they can’t switch providers anyways, either because their employer gives them a discount on a certain carrier, they only get service from a certain carrier at home, or there’s local circumstances (like how only Verizon phones currently work in the DC metro).
This is the mobile market: just because initial sales are poor doesn’t mean that sales potential is not there. Palm’s legacy is not with mobile internet, but with great UI and personal organization. Making a phone with no internet radio, no WiFi, just let people load apps onto the phone from their computer and only pay $30 a month? Sounds like it could be a pretty popular phone to me, especially if you run commercials that show that an iPhone costs over $2,000 over 2 years and this Palm phone costs only about $1,000 over the same 2-year period.
Verizon likes to dictate the devices on their network down to the core. Not surprising that they would turn down Palm.
This could be a matter of timing. If Apple walked in the door today, Verizon might well turn them down as well. At least until they have their network “ready” for the smartphone.
They only “dictate” their regular phones, actually. Not so much with the smart phones, they usually leave those untouched. Keep in mind, this has only been happening for maybe 2 years TOPS. Before that, yea, they fucked every phone they could get their hands on.
Verizon just waiting for a little Windows 7, pink Zune phone love. Best forget about the Palm Pre, its days are numbered.
Verizon easily could have made a killing on the Pre and easily sold a million of them before they picked up the iPhone.
i will switch to sprint
Interesting that Sprint was on the recent list of companies that could go bankrupt in the coming year. Those companies were said to have the “highest probability of declaring bankruptcy among publicly traded firms.” Also on the list: Hertz, Macy’s, Goodyear, and AMD.
Sprint has been on that list for years, lol.
Verizon doesn’t get it. WTF are they waiting on?
Oh god no. I thought things had changed over at Big Red, but apparently not. Call me crazy pants, but I think offering your consumers a wide variety of top of the line operating systems is a good thing, and with Android, webOS, and Blackberry, Verizon would be able to shake off its deserved rep for having shitty smartphones.
May just be a complete rumor, and I bet you thestreet.com won’t think twice about toying with my emotions.
Palm is junk — total garbage!
Palm will go out of business
smartbooks, next gen iphone, tablets, etc are the future
You assume:
1) Palm only has WebOS and smartphones in its future
2) Apple cannot be challenged even as it becomes The New Borg
3) Palm is interested in competing in a huge number of markets when it doesn’t even have 100 people working for it right now (if I recall correctly).
Rubenstein is pulling Palm out of the mud – it takes time. The original iPod didn’t sell that well because, in part, it was Mac-only – a direct correlation to low sales on new Palm products since they’re Sprint-only.
Really hasn’t been a better time to buy Palm stock IMO.
Hopefully they are waiting on an Android phone :-D
Terrific. I love Verizon’s coverage and service; here in DC, it’s the only service that works on the Metro (a huge plus). But I was really looking forward to picking up a Palm Pre come 2010.
Maybe it’s about time to switch carriers…
Sprint will work in your Metro too. Everyone seems to forget that Sprint roams on the Verizon network (and roaming is free).
With Sprint you get good phones, cheap service, and “The Network”.
You iPhone-worshiping “Crunch” boys have been “all secretly rooting” for Palm? REALLY? Please, don’t make me laugh. It’s a bit insulting, really.
Is it?
Anyone really suprised?
Verizons trend is to talk to everyone but signs deals with no one. This is because they (Verizon) feels their network is superior and therefore everyone should cut deals where most of the revenue splits to Verizon.
Whats funny is all of these companies go knocking on Verizons door first, then once the little guy states how much revenue split they want to keep Verizon ends the meeting and then has RIM or LG, pump out some some poor duplicate phone.
Its Telco think people. Wont change until they have too. It appears ATT is trying to be progressive but not Verizon.
I think they have thee plate full from what I read 4 androids (3htc and a Motorola) 5 new windows devices this year and a couple new blackberrys and the new Microsoft “pink” phones 1st quarter next year I think they have a lot on there mind. This could also signal a custom made palm device just for big red
I switched from iPhone to Palm Pre.. Never looked back. More and more folks at the office doing the same.
Palm Pre is simply a better experience.. and has Tethering, Podcast app, etc.. uh.. does apple allow apps for that?.. no.
I’m in the same boat as you. Switched from my iphone a few months back and couldn’t be happier. The Pre does everything I want and I love the UI, the keyboard, and the lack of AT&T. I have 6 friends who have all gotten the Pre and they love them too.
If techcrunch is really “secretly rooting” for the Pre, what’s up with the lack of coverage of Pre apps? It seems like there’s no less than 2 posts/day on some new iphone app.
Did you hear that the Pre is coming to Europe? I don’t think it is a killer for Palm not to be on Verizon as there is a WORLD out there and that world uses GSM. Now, that the Pre is available as a GSM Handset, it will grow much faster and does not need Verizon at all!
Oh Verizon, please don’t ruin my hopes for a good phone. I’m only staying with you because of the upcoming Android phones, if you mess that up for me I’ll be moving along.
It’s too bad that Verizon has such a mediocre phone line up. Now with the new Sprint plans offering unlimited everything starting at $69.99 and basically the same coverage it’s getting harder to justify staying with the big V. Instead of basically solely focusing on coverage, which they’ve got down, maybe invest a little effort in joining the rest of the pack and building a decent phone portfolio.
Learn to buy unlocked phones and them select the operator and the plan you want. USA operators are driven by Lucifer himself, they care only about their profit and not about what is good for the users!!! Wake up USA!!!
I imagine the Verizon senior executive team still using the old bag phones with the shoulder strap and two-foot long flip-up antenna…
I got confused, what’s the truth of pre?