Friday, April 30, 2010

Silly smartphone revisionism

Sorry, I just can’t take this lead sentence from page B1 of today’s NY Times:

For much of this decade, the fates of Palm and Motorola were intertwined.
The parallel is just plain silly.
  • Motorola invented the handheld mobile phone in the 1970s, Handspring (later bought by Palm) shipped its first phone in 2001.
  • Motorola has been exporting phones to Japan and Europe since the 1980s, while Palm has always been a North American phenomenon.
  • Motorola was late to digital, Palm was always digital.
  • Motorola was late to smartphones, Palm was only smartphones.
  • Motorola was a radio company, Palm a PDA company.
  • At their peak, Motorola made good hardware and so-so software, while Palm had so-so hardware and good software.
  • Motorola phones tended to be slim and light while Palm phones were big and clunky.
  • Because of its lousy performance, Motorola’s handset division is (someday) being spun out, while Palm sold itself cheap to HP.
Need I go on?

Yes, as the NYT reminds us, Motorola hitched its wagon to Android in October 2008, while Palm is pursuing its go-it-alone strategy (now with HP’s money.)

Motorola (corporate) revenues continue to decline, but at least this quarter is profitable, and CEO Sanjay Jha hopes to ship 12-14 million smartphones in 2010 — with smartphones accounting for the majority of handset sales and raising the average selling price. (Almost all of those smartphones have been Android.)

So the explanation is pretty simple:
  • An open source operating system (like Android) is the ultimate commodity software: free and available to all firms.
  • If software is a commodity, then the only hope to differentiate and gain share is through hardware competencies.
  • Motorola has those competencies (like Nokia and the Koreans) but Palm doesn’t.
By the way, if software becomes a commodity, that’s not good news for Apple and Research in Motion, whose have convinced consumers and enterprises (respectively) to buy phones because of their software, not their hardware.

1 comment:

Kenneth M. Kambara said...

Since when is it reasonable to expect headlines or lead sentences to remotely resemble the gist of the article?

Software as a commodity in this case is a stretch. That needs to be elaborated upon.