Palm's iPhone blunder

In the world of TV shows, they have a term for that moment when a popular TV series goes over the top and begins its inexorable decline. It's called "jumping the shark," a phrase that originated with that ridiculous Happy Days episode in which the Fonz literally jumped over a shark on water skis--wearing his leather jacket all the while, of course. I'm not sure what they call it in the world of technology when a company hits a tipping point, but I remember the moment when I thought Palm had jumped the shark.

It was a couple of years ago, and the good folks from Palm had come out to give us an early preview of a new handheld the company was going to be releasing, the LifeDrive. What was weird about the moment was that the LifeDrive was actually a pretty sexy device on the surface. It was sleek looking, and it had a nice, sharp screen, as well a built-in hard-drive and Wi-Fi capabilities. The LifeDrive was Palm's response to the iPod; the only problem was it cost $500, it didn't have a cell phone in it, and it was a year too late.

"This is nice," I said to the Palm reps, "but who's going to buy it?"

The LifeDrive, of course, was Palm's last-gasp effort to breathe a little life into the dying handheld market it had pioneered. At this point, the Treo was in full swing and still enjoying rock-star status, so the idea was to get the non-cell-phone side fired up with something more than low-cost, small-margin units. But it didn't take a genius to figure out that Palm needed to pour all its resources into making better, more innovative Treos.

To be fair, Palm deserves credit for the Treo. It's still a popular device, and Palm has made some significant improvements as it's progressed from the 600, to the 650, to the 700; and now to the 680 and the 750. Yet the overall design of the Treo hasn't changed all that dramatically in the last three years, while a growing horde of slimmer and sleeker smart phones, such as the Samsung BlackJack, the Motorola Q, the HTC S710 Vox, the LG Prada, the Nokia E62, and the BlackBerry 8800, have already pulled both mindshare and market share away from the Treo. And now there's the iPhone, which is proving to be the mother of all mindshare suckers, months before it even hits the market.

Now before you go thinking that I pray at the temple of Apple, you should know that I don't think the iPhone is guaranteed to be a runaway success. It's really expensive ($500 to $600), and chances are the touch-screen interface--especially the virtual keyboard--won't appeal to everyone. Battery life may be an issue. And the original version of the iPhone will not be a true 3G phone. In short, for Apple to get everything right out of the gate would be remarkable. And for those who think Apple is infallible, take a look at the darkened--once white--palm rests on the Macbook that I told my mother to buy. You'd think that someone in the quality control department would make sure the plastics Apple used weren't prone to discoloration and absorbing the skin's natural oils. Sadly, that wasn't the case. (Apple has since corrected this problem and she's having the plastic replaced this week--but it's still surprising.)

I digress, however. Palm has jumped the shark. Some might argue that it actually jumped the shark earlier than I've indicated--that it stuck with the Palm V (and black-and-white organizers in general) for too long, that it had no real follow-up to version 5 of the Palm operating system (Garnet), that it lost control of the Palm OS to Access, and that over the years it has lost millions on branding/naming fiascos (Palm Pilot, Palm Source, PalmOne, and finally just Palm). And let's not forget that the Treo itself was developed not by Palm but by Handspring--a rival company started by Palm's disenfranchised founders that Palm ended up acquiring. And Palm's recent adoption of the Windows Mobile OS in some of its flagship products (the 700w and 750) is more or less an admission that its own operating system has serious shortfalls. But let's not dwell on the past. Once you've jumped the shark, what's one to do?

First step, hire a consultant--er, well, a new designer in Palm's case. As rumors continue to swirl that Palm may be on the block, word went out that Palm had inked a deal with Paul Mercer, a top software designer and former Apple engineer. According to the New York Times, Mercer and a couple of employees from his design firm, Iventor, had joined Palm, but that Palm hadn't bought the company outright--in other words, Mercer is most likely a mercenary. He's known as an interface guru, and it seems that Palm--along with other cell-phone manufacturers in the industry--have seen enough of the iPhone in action to realize that Apple can do the most damage by bringing simplicity and elegance to a complicated, feature-rich device. And contrary to what some industry analysts are saying, that also involves hardware and not just software design. Where you put the buttons and how the keyboard is laid out--and whether the phone is a candy-bar or slider--does make a difference.

The one big issue for Palm is that, by the time it brings out its new, revolutionary device, Apple will already be on to its next-generation iPhone, which, as evidenced by the progression of the iPod, will be significantly better. The Motorolas and the HTCs, with their Windows Mobile-powered devices, will also have made their refinements. Once you're behind the curve, it's hard to get out front again--especially when it comes to cell phones, where the service providers call a lot of the shots and can muck things up. (I can't see Steve Jobs allowing a service provider to dictate to him, but it is a complicated dance for most cell phone makers).

I hope I'm wrong. I like Palm. I liked the LifeDrive. It just should have been the PalmPhone. But unless the company can get back to innovating--and quickly--it's quite possible that the once mighty Treo might end up as yet another model in the Motorola or Nokia product line.

What was Palm's biggest mistake? TalkBack to me below.