Could a Better Carrier Have Sold Palm's Pre?
Palm has fired the creators of its ineffective Pre advertisements, but the tossing overboard of ad agency Modernista isn't going to right its sinking ship.
Palm's (PALM) hoped-for comeback is certainly foundering. The problem isn't merely a weak ad campaign, but poor timing, an ill-chosen launch partner in Sprint Nextel (S), and a lack of support from software developers. Palm's experience proves that a carrier can still make or break a brand in the smartphone market.
At the 2009 Consumer Electronics Show, lots of people applauded when Palm announced its plan to rise from the ashes. Palm was a beloved brand and many said that a new operating system, hardware, and marketing would help revive it. But Palm's webOS-powered devices aren't selling well in Sprint and Verizon Wireless stores. Instead of marketing Pre smartphones as high-value handsets, the carriers are holding fire sales to rid themselves of excess inventory. Advertising Age blames marketing missteps.
Motorola (MOT), also attempting a comeback, provides a contrast to Palm with the success of its Droid and Backflip phones. Mark Sue, an analyst with RBC, credits some of Motorola's success to the support of its carrier partners in an Apr. 6 research note. It didn't help that Palm launched exclusively with Sprint while that carrier struggled with subscriber turnover. Sprint's six-month exclusive window for selling Pre phones meant that the U.S.'s other CDMA carrier, Verizon Wireless, had time to pump $100 million into a marketing blitz to promote Motorola's Droid, rather than Palm phones.
Now Palm is trying to stay in the game by engaging customers at the point of sale with "brand ambassadors" stationed in Verizon and Sprint stores. Enabling sales staff to understand the benefits of Palm's webOS is a step towards recovery, but the road will be long. One problem is that many consumers enter a phone shop already knowing which device they want, based on marketing they've already seen.
As a former Palm Pre owner—I waited in line to get one on launch day and shared my first impressions in a blog—I agree that Palm's ethereal advertising didn't help its cause.
Choosing a different launch partner or limiting single-carrier exclusivity to less than half a year might have made Palm a more formidable challenger.
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