Russell Beattie

PalmOne's sold a million Treos (isn't that quaint?) and to "celebrate" they're giving away a free Treo every five minutes from now until midnight EST. You can enter the contest here, I just did. It'd be great to have a Treo... so I could pull it out and mock it at meetings and other gatherings of mobile professionals. You see, the Treo 600 was launched in September 2003, so it's taken them roughly 20 months to sell a million units, which works out to about 50,000 Treos sold a month. That's pretty pathetic. Keep in mind there were roughly 675 million mobile phones sold last year worldwide, including 14.38 million Symbian phones (and 6.67m in 2003). Palm's numbers aren't just anemic compared to this, they're statistically nonexistant.

It's official: Palm (One/Source) is completely irrelevant in the mobile market.

I'm a little uptight about this because even after years of beating this drum, I sat in a room with a few dozen Silicon Valley entrepeneurs a few days ago getting hammered on because half of them had Treos. "Wonderful!" I said, "It's still not a market." I tried citing statistics, I tried reasoning, berating, and I tried mocking but I could tell I wasn't getting the message through. It was empirically obvious, most of the people in the room had a Treo, so it must be a really popular platform, right? Wrong. If you've got a Treo you might be a cutting edge technologist, but you're in the backwater of mobility. Trust me. (Actually, don't trust me, just look at the frigin' numbers.)

Now, I will admit that here in the U.S. Palm is doing better that its competitors. The numbers I've seen show that Palm phones actually outnumber both Symbian and Windows Mobile phones here by a double. But honestly, out of 170 million American subscribers, the total smart phone numbers are still ridiculously low, so I wouldn't pay much attention to this. The fact is that Palm is a niche player in a niche market (there are more cell phone subscribers in China - 300m - than there are *people* in the U.S.) as time goes by they will increasingly become less relevant as a platform, not the opposite. There's just too much competition from much bigger players for this not to be the case.

As time goes on, the pressures from Asian manufacturers on one side of the world and European conglomerates on the other, American OS makers (Microsoft) and manufacturers (Motorola), as well as the enterprise plays (RIM's Blackberry) are going to continue to make PalmOne's already small world even smaller. If there was any salvation it was in PalmSource, but they've since blown any amount of developer and consumer confidence they might have had after they bought BeOS a few years ago. First it was Cobalt, now it's Linux and that transition is another year off at least. With no licensees of note except for their beleagered sister-company PalmOne, PalmSource is basically sinking with the rest of the ship.

And no, there's no chance for the Palm companies to become the "Apple of the mobile market," with a strong, dedicated base of customers which represent a small but lucrative business. First, it's just not happening: PalmOne's profits are only barely in the black. And secondly, mobility isn't that mature yet, and the power/price curve as well as the continuing competition in mobile software and services will eventually obviate most of the need people have for Treos. And with no Treos, there's no Palm.

I hope I've made myself clear. There are two things I hear in the Valley that make me insane. The first is people talking about WiFi gadgets. See that Moto cancelled the MPx WiFi phone? That was predictable. Repeat after me: "Manufacturer's customers are carriers, not consumers." Say it again. And again. The second thing that drives me nuts is the Valley's obsession with Palm. I'm glad to see some numbers on this so we can safely ignore them from now on.

-Russ