Was Palm wrong to drop Windows Mobile?

No one really was surprised when Palm announced it was dropping support for Windows Mobile.  Palm had embraced Windows Mobile for its business-oriented devices, including its popular Treo line, after its own PalmOS stagnated and was no longer competitive.  But the company was bleeding badly and ultimately ended up at a crossroads: seek a buyer or attempt to reinvent itself as a last stand to avoid shutting its doors.  Palm chose the latter and began working on an allegedly revolutionary new operating system and, before its launch, received an infusion of investor funds that would keep the company on life support to see the new project through.

As soon as Palm debuted the Pre and its new WebOS, people immediately questioned how much longer Palm would develop Windows Mobile devices.  First, there was the issue of limited engineering resources.  Palm already had been pared down to a ghost of its former self and might not have enough engineers to support a dual-platform product strategy.  Second, and perhaps even more importantly, there was the issue of perception.  Equity investors didn't pour money into Palm so it could continue developing around a Microsoft product: they believed in Palm's new strategy and likely wanted to see the entire company united around the Pre and WebOS.  From a public investor side, if Palm truly believed in its new WebOS, wouldn't it want to standardize on the platform for all its devices?  So, Palm's decision to abandon Windows Mobile had more to do with the company's overall health and competitive prospects for the Pre than it did about any perceived shortcomings of Windows Mobile.

But did Palm make the right decision?  Well, I'd the say the question isn't whether Palm made the right decision, but rather, whether the Pre and WebOS have sufficiently replaced the role Windows Mobile devices had in Palm's lineup.  And the answer is no.  Although sales were down and losses were high, Palm, like RIM, has a loyal following.  It's Treo devices were relatively successful and often the device of choice for professionals or consumers seeking a Blackberry alternative.  Palm's embrace of Windows Mobile over its aging PalmOS kept the Treo line viable against the competition.

With the Pre, though, Palm alienated its loyal user base, especially business users.  Palm decided to chase Apple down the consumer-oriented-web-and-multimedia phone road.  Sure, the Pre supports business-related functions, but it wasn't designed for them.  In fact, rather than provide a PC-based syncing utility, Pre users are encouraged to use Google for PIM functionality.  Although it's an attractive device with a beautiful screen, the Pre's Motorola PEBL-like design doesn't quite evoke business prowess.  This might not matter if the Pre was a pleasure to type on, but regrettably, the slide-out keyboard's small keys and concave indentation make it difficult to type on for any extended length of time.  Some users also have complained about the Pre's build quality.  The dearth of applications and its online-driven experience make the Pre an inadequate successor to a road warrior's trusty Treo. 

That Palm has yet to reveal its plans for the Treo line and, instead, is about to release another consumer-oriented device tells me that the company simply isn't catering to business users.  It's a shame, too, because Palm had gotten quite good at developing elegant, quality Windows Mobile phones.  Its latest Treo iteration, the Treo Pro, was well received and, ironically, was praised in areas where the Pre has been criticized: it has solid build quality (though the Treo Pro was designed by HTC), a good keyboard and is generally fast enough.  Paul Thurrott, a frequent critic of Microsoft's mobile strategy, praised the device as an example of what Windows Mobile phones can be.

While I understand Palm's decision to center on a single platform, I'm not sure continuing Windows Mobile support would've required that many resources.  Palm could keep contracting HTC for device development while dedicating minimal engineering talent to Windows Mobile needs.  And, a dual-platform strategy could work if Palm was committed to it and the lines of delineation were clear.  The WebOS  and Pre could be the flagship of Palm's consumer line while Windows Mobile could anchor a Treo line of business devices. 

Palm also would have a willing partner in Microsoft, who I'm sure would rather keep Palm as an OEM partner.  Palm could've taken advantage of a lot of free press from Microsoft during the Windows Mobile 6.5 and Marketplace launch.  Imagine if Palm had debuted a new Treo phone at the Microsoft launch event and solidified itself as a premier OEM for business-oriented Windows Phones.  Furthermore, it would be maintaining the Treo brand, which was well-known and already had a loyal following of users waiting for an adequate replacement.

Some people are suggesting that Palm ditch the WebOS in favor of Android.  Regardless of the platform, my point is that Palm could maintain two platforms and leverage existing brand loyalty and an installed customer base.  But, Palm bet the house on the Pre and WebOS.  The WebOS certainly has its merits, but the Pre form-factor is a liability.  And while the Pixi form-factor seems more compelling in some ways, based on that phone's target audience, business users and hardcore Treo fans disenchanted by the Pre shouldn't hold their breath.

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