Palm's New Treo Pro Signals Innovation Taking Hold
NEW YORK -(Dow Jones)- With the Treo Pro, Palm shows it, too, can innovate.
The Sunnyvale, Calif., company on Wednesday unveiled its new business-class smartphone, which features a sleeker, cooler look and represents a radical departure from the standard clunky Treo model. It signals a willingness on the part of Palm to shake things up with major design changes - an attitude it lacked in the past few years.
"It's a positive benchmark," said Gartner analyst Ken Dulaney. "They had real form-factor problems. With this product, they correct those issues."
Palm, once the pioneer in the smartphone market, has watched its dominance and sales slide as it failed to keep up as higher profile players such as Research in Motion and its Blackberry line and Apple with its iPhone stole the spotlight. As a result, Palm got bumped down to a lower tier of handset makers, despite a loyal fanbase.
As a result, shares have fallen roughly 20% in the past year, although the stock has rebounded in the past month. Shares recently traded up 2.3% to $7.93.
The company appears to be making progress in its efforts to catch up with its competitors. Palm recently passed the two-million mark on unit sales of its consumer-focused smartphone Centro. The Treo Pro will be released through various European carriers in September. An unlocked version for the U.S. will hit the market this autumn.
"It's a significant step for us," said Brodie Keast, senior vice president of marketing for Palm. "You can expect every product to be an improvement over the last one."
In addition, it's a higher-end device the company has lacked. Unsubsidized, the phone's suggested selling price is $549. If the product can sell well enough, it will offset the effect of the Centro which, while popular, is much less profitable because of its lower price tag.
"Is it a breakthrough product? I don't think it is," Dulaney said. "It will let the rest of the company shine through, though."
Keast said Palm plans to introduce lines of lower- and higher-end phones on both the business and consumer side.
The Treo Pro is the latest product to have the fingerprints of Chairman and product development guru Jon Rubinstein. While the Treo Pro was already on the product roadmap when Rubinstein got to Palm, the executive heavily influenced the look and feel of the product. In addition, Palm plans to offer a number of services to support the device, including advising businesses on their mobile work force.
In addition to its slimmer form factor and larger screen, the Treo Pro offers global positioning systems, or GPS, capability and WiFi. The smartphone features the largest battery that Palm has used. It also has a number of shortcuts that Delaney said "smoothes out the rough edges" of Microsoft's Windows Mobile 6.1 operating system.
The third-generation wireless connection in the Treo Pro works in the U.S. and Europe. Because it runs on GSM technology, the device can only work on AT&T and T-Mobile USA's networks. T-Mobile is a unit of Deutsche Telekom.
Alongside the cosmetic change, Palm is more fully embracing the practice of using names for its devices, and getting away from numbers. It is something other handset makers have long done as a way to generate more awareness and buzz for their individual phones. As a result, epithets such as Blade, RAZR, Dare and Rumor are blasted out to consumers.
"Using names is more memorable and consistent with our brand," Keast said.
-By Roger Cheng, Dow Jones Newswires; 201-938-2020; roger.cheng@dowjones.com
(END) Dow Jones Newswires
Posted to the site on 20th August 2008
