Palm Inc Failed, Why? A Strategic Review of Palm Inc

Knoji reviews products and up-and-coming brands we think you'll love. In certain cases, we may receive a commission from brands mentioned in our guides. Learn more.
This article is a strategic review of Palm Inc. It covers an introduction to Palm Inc, financial position, objectives, products, competitors, SWOT analysis of Palm Inc and recommendations.

This article is a strategic review of Palm Inc. It covers an introduction to Palm Inc, financial position, objectives, products, competitors, SWOT analysis of Palm Inc and recommendations.

Palm Inc Strategic Review: Introduction Palm Inc

Palm Inc is a leading mobile product provider that creates products which better the lifestyle of users and business customers around the globe. With its much investment in innovation, the company brings products of its own especially the smartphones. Other that, the Palm Inc boasts of the Palm Foundation which has the goal of providing both financial and donations of products as well as encourages the spirit of volunteerism among its employees. This is not all, Palm Inc endeavor in ensuring that it protects the environment for sustainable growth to be achieved, in the various places where it operates in. This is clearly found in its environmental stewardship program. This Palm Inc Strategic reviews aims at assessing the current position of the company and give some recommendations.

Palm Inc strategic review: Current Financial Position

Other than this, this Palm Inc strategic review reveals that the company is facing some challenges which run from increasing number of competitors to financial challenges. According to the Form 10-K Annual Report, as per May 31, 2009, both for its two product lines, Palm Inc recorded a drop in its annual revenue as well as worked with a net loss of $ 735,872,000. This is a trend that has been from the year 2007 for both its markets in the US as well as outside the US. The asset values of Palm Inc have also reduced in the past three years showing that the company needs urgent intervention.

Mission, vision and Strategic Objectives of Palm Inc

The success of Palm Inc is founded in the company’s vision that is to give innovative products that truly use technology is a beneficial way. This vision, together with its mission of creating truly powerful products has enabled the company to continuously respond to the customer needs in the various markets which it operates. The Palm Inc strategic review shows that the company creates highly differentiated products which make it have a unique standing especially in the Smartphone industry.

Further, from this Palm Inc strategic review, it is rather true that the performance of Palm Inc is expected to be better owing to its corporate strategy which is aimed at making it a global leader in mobile device production. This is owing to the fact that the demand for smartphones is expected to rise as consumers change from voice- centric cell-phones to full-featured, software-driven mobile devices. The Palm corporate strategy is outline in company’s objectives which are as follows:

• The company aims at differentiating its products thus bring to market very not only highly innovative but also easy to use products.

• Development Palm webOS ecosystem as this will enable many third party application developers to give their contribution. This will boost product offering as well as strengthen the various brands.

• To enhance the company’s product recognition all over the world. This is to be achieved by better marketing strategies and relations to the public as well as improved services for the customers. The entire community involvement will also be of essence.

• To uphold the outsourcing business model in its operation so as to limit capital and fixed costs as well as ensuring high flexibility.

Basing on the above corporate strategy as well as objectives, this Palm Inc strategic review clearly shows that realize that the major strengths for Palm Inc include “Palm webOS ecosystem” as the company gives an open platform and this will make more third party developers to use their expertise and respond to the market needs within the various communities they work in. In addition to that the outsourced business model will ensure that more participation on its business by the third party manufacturers, technologies and service supplies and so on reduce the liabilities of large capital investments as well as fixed capitals. Competitive device analysis from VeriTest® has shown they are favorable. On the contrary the major weakness that the company may face is involvement of non-professional third party participants who may dilute the company’s standards. The overdependence on the third party may also affect the smooth operation of the Palm Inc Company as it may require substantial capital to operate globally.

Strategic review of Palm Inc Competitors

This Palm Inc strategic review finds out that Palm Inc faces stiff competition owing to the reality that technology in this industry is quite dynamic and there should be rapid respond to market changes. The main competitive factors that greatly affect the smartphones markets are how easy at accessing the marketing channels as the prices of the various mobile devices. Product uniqueness, quality and time of sale also affect market competitiveness. The main competitors of Palm Inc are Apple Inc, Nokia Corporation, Research In Motion Limited as well as Asustek, High Tech Computers, among others.

Strategic reviw of the Palm Inc Products

From the thorough assessment of Palm Inc, it is clear from this Palm Inc strategic review has two product lines currently available with more emphasis being put on smartphones which target various business markets and direct consumers. The smartphones come with high technology, innovation and a huge range of tools as well as personal and entertainment applications. In addition, since Palm Inc initially produced handheld computers which it longer does, it still offers customer support services to those who own its handheld computers. There are also limited number of handheld computers in various retail store thus forms part of its sales annually. The products are sold via different outlets which include the internet and retail centers as well as through various wireless outlets.

For palm Inc to remain competitive and march up with its top rivals, it has adopted the competitive strategy of brand building and marketing to other parts of the world. This is to be achieved through innovation of both the company and high quality third party partners. This is to help ensure quick responses to the change in the smartphones industry as a whole. There is also much focus on smartphones as a way to ensure that their products are the best and most affordable as there is a possibility of cheaper products to come to the market.

Having gone through several literatures what follows is the SWOT analysis of the Palm Inc. The analysis has taken into consideration the various key issues that are at interplay in the mobile device industry as a whole thus identifying those that have an effect to Palm Inc.

Palm Inc Strategic Review of Major Strengths

• Unique and good identification of its various brands which have strong

• Good combination of the software and hardware thus easy to use.

• Focused products to bring some desirable feature to end users

• Robust Research and Development Capabilities according to ResearchAndMarkert, Sept. 2010

Palm Inc Strategic Reviews of Major weaknesses

• A very poor performance in the financial year 2009 where the company recorded a huge net loss according to ResearchAndMarkert, Sept. 2010.

• The company’s inability to differentiate its products from competitors

• Reliability Issues due to less expertise in other areas as well as functionalities.

• The high dependency on few customers who buy large volumes

Palm Inc Strategic Review of Opportunities

• General trend of rise in the demand for smartphones.

• The revolutionizing handheld industry with no monopoly where and well as the fact that customers yet don’t know what they want hence flexibility in designs and applications.

• The great and advance features of the pre palm innovation

Palm Inc Strategic Review of Threats

• The market is becoming increasingly competitive as well as new incomers into the area like Nokia, Sony, and Microsoft with long success history in electronics as well being large corporations according to Softpedia, Feb 8, 2010.

• Competition from other similar products like MP3 players, iPods, digital cameras and so on which have some functionalities that are in the smartphones.

The above SWOT analysis has taken into consideration the general trend of events in the Palm Inc Company as well as the entire mobile device providers with special emphasis on the smartphones where the company is a substantial player. It is a reflection on what is happening in the smartphones industry as a whole. Among other, Palm didn’t compete well as for instance. These Palm Inc strategic review reveals that the company did not give its customers great reasons as to my they should buy the Pre as opposed to other models such as the i-Phone, the Android phone or a blackberry according to Cellcompare, May 11, 2010. This is an illustration of competition among the smartphones manufacturers.


Looking at the objectives which are adopted by Palm Inc, these Palm Inc strategic review recommends that there should be an emphasized on them as there are an opportunities for the company to globalize its operations especially with the outsourced business model and open Palm webOS ecosystem. These factors which will together work to increase sales as well as brand recognition without the company being forced to increase its capital investments. In doing so, quality must however, be maintained, a fact this Palm Inc strategic review finds very important.

The company should stop over-depending on very few customers that move large volumes especially in the North America. According to the Form 10-K Annual Report it is revealed in this Palm Inc strategic review that any failure of the much depended customers in North America could affect the company in a myriad of ways especially in terms of cash Form 10-K, 2009, p.16. This has an incentive for company but may also affect the company so much. The other issue is the overdependence on wireless carriers. Any changes in the wireless carriers demand will greatly affect its operation. For instance this Palm Inc Strategic review has realized that the dependence on Sprint Nextel wireless carrier which is currently shrinking though still number 3 in US is unwarranted for according to Businessinsider, Apr. 29, 2010.

Finally research at the company level should be emphasized using the internal staff so as to ensure cheaper technologies are developed to merge with the competitors. The cost of research has dropped to about $177.2 million in the fiscal year 2009 from the previous year’s value of $202.8 millions (Form 10-K, 2009, p.8). This may be as a result of the company’s current position and should be strengthened. Innovation comes through Research and Development. The above are the main recommendations of Palm Inc Strategic Review. Other recommendations should be sought for.


Palm, Inc Form 10-K Annual Report for the Fiscal Year Ended May 31, 2009 Filed 07/24/09 for the Period Ending 05/29/09,