FUD Award 2/26

The Winner of the FUD Award for this week is Business Insider and Dan Frommer

The article starts harmlessly enough talking about the horrible week Palm is having. Palm’s stock tanked this week after Palm provided guidance that their revenue numbers were going to be below the Street’s expectation. Added to that were reports that the Palm Pre Plus/Pixi Plus launch on Verizon was not going well at all. In fact, carriers were holding off on orders until they could clear out units in their channel. That’s the initial context, but Frommer jumps to this amazing conclusion

“Palm slashed its guidance today and shares are down 20%, as the company’s comeback attempt in the smartphone market hits a brick wall.In the short term, that’s good news for Apple, whose iPhone has been able to gain ground despite increased competition. But in the long term, it’s more evidence that Apple is screwed once visionary CEO Steve Jobs eventually leaves the company.”

Now Palm is loaded with ex Apple executives including CEO John Rubinstein. Frommer details the entire ex Apple team running Palm. That’s the rationale for his claim. Rubinstein and others are “Apple”, and without the guidance of Steve they have failed.

Now, here are the important facts as to why Palm is struggling;

1. Palm was in OS development hell before the iPhone launched. They were so desperate that they using Windows Mobile before the iPhone launch. An OS so bad that even Microsoft has destroyed it.

2. Web OS although innovative didn’t lead to an actual phone being available until 2 years after the first iPhone. Apple had a massive lead.

3. Palm’s idea of innovative technology was ill-conceived Palm Folio. A laptop for your your cellphone, an idea so bad that Palm had to cancel it after presenting the device at the All Things Digital conference.

4. Palm completely ignored the potential impact of the iPhone due to CEO Corrigan’s belief that

“We’ve learned and struggled for a few years here figuring out how to make a decent phone. PC guys are not going to just figure this out. They’re not going to just walk in.'”

Palm should have started the Web OS initiative right after the announcment of the iPhone. Instead they got power slammed by Apple and iPhone. That level of arrogance by Palm is the primary reason that Palm might never recover.

All of these issues put Palm in a massive hole that Rubinstein would have needed to be Houdini not Steve Jobs to have stopped Palm’s freefall. Add in the rise of Google Android, and Palm is fighting a war on multiple fronts.

Back to the FUD, Frommer’s back to spreading the Fear that Apple is done without Steve Jobs. That claim may end up being accurate, but Palm’s woes are no clear evidence of that. It’s flawed logic to tie one event to another. And the Apple will fail after Steve Jobs’ leaves is the worst FUD out there.

If/when Steve leaves Apple, it appears he will leave a company with massive cash flow ($40 billion), great stock price ($200+ a share), and a product portfolio that includes a top selling smartphone, the best selling media player, and in terms of revenue Apple is one of the top five computer manufacturers in the world. The current Apple team will have all those advantages.

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