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Palm ‘relentlessly focused’ on Pre: CEO says his patents can deflect an Apple attack

All the pieces are in place for a turnaround at Palm Inc., CEO Ed Colligan said in extolling the company’s next-generation platform, due to launch in months.
Perhaps the biggest variable in that turnaround, however, is a lackluster economy with limited visibility into future consumer demand for smartphones, Palm’s bread-and-butter. And Palm faces possible patent litigation over its multi-touch platform innovations, if Apple Inc.’s recent, veiled threat becomes a real, legal challenge.
Prickly competition
Colligan acknowledged as much without dwelling on factors beyond his company’s control.
Palm needs to “really nail the forecasts” for demand to manufacture and ship sufficient numbers of the upcoming Pre handset, which delivers the company’s next-gen platform, dubbed WebOS, Colligan said.
“We want to be careful, due to the significant lead time for some components,” the Palm CEO told an audience gathered at Thomas Weisel Partners Technology and Telecom Conference 2009 in San Francisco.
On Apple’s implied threat to challenge anyone whose products might infringe on iPhone-related patents – widely perceived to be a shot across Palm’s bow – Colligan took a practical tone, and an oblique angle.
“There are no issues right now with Apple,” the Palm CEO pointed out. “If something happens there, we have the patent portfolio to defend ourselves.”
“The whole area of patents is a labyrinth,” he added, with the air of man reluctant to open a Pandora’s Box.
Palm has one of the most highly rated patent portfolios in the smartphone space, Colligan said, without being specific.
He compared Palm and its competitors – he seemed to imply Apple – to two porcupines, warily circling each other, suspicious but careful not to deliver any painful jabs.
“We’re respectful of each other’s innovations,” Colligan said, again implying Apple without naming names.
Wave of the future
On the subject of application developers and their interest in Palm’s new WebOS platform, Colligan said there’d been an “amazing initial response” that was “gratifying.” He said the WebOS platform was accessible and straightforward to develop for, and reminded his audience that Palm had a long-term, existing base of developers writing for its products. The company will offer a downloadable application store, but when asked for specifics Colligan didn’t say whether that would take place concurrently with the Pre’s launch.
Colligan also ignored specific questions on the Pre’s launch timing at Sprint Nextel Corp., which analysts widely assume would be optimal in May, given the vendor’s vague references to the first half of the year.
“We are just relentlessly focused on getting the device and an SDK (software development kit) out the door,” Colligan said.
The Palm CEO said the company has a “robust product roadmap” based on the WebOS platform, would continue to create and ship Treo devices based on Microsoft Corp.’s Windows Mobile platform for business use and would continue to support its Palm OS-powered Centro devices. But, the company will no longer make Palm OS-based products, he said.
Sprint home to most Treo users
Palm will focus on its own products and is not currently considering licensing its WebOS to others, citing a history in which that practice came back to bite the company when competitors’ products overshadowed Palm’s own line.
Colligan said that Sprint Nextel has the most Palm users of any United States carrier and that was a logical place to launch the Pre, which is exclusive to industry’s No. 3 carrier for an undisclosed period. (An analyst at the meeting suggested that period was six months, but Colligan did not confirm it. A company spokesperson later said it was Palm and Sprint’s policy not to disclose such matters.) And Sprint Nextel will make “a significant investment” in subsidies to bring the Pre handset to market at a competitive price point, which many observers say must be $200 or lower. Palm is pursuing international carriers as well, particularly in North America, Latin America and Europe, the CEO said, which are not governed by the exclusive agreement with Sprint Nextel.
Meanwhile, $100 million in fresh cash from its main venture capital patron, Elevation Partners, should be enough to “bridge the gap” between the company’s current situation – mounting financial losses during its platform transition – and future profitability. The Palm CEO extolled the experience of Jon Rubinstein and Fred Anderson at Elevation Partners, and cited Anderson’s experience in helping Apple turn its own business around.
“We’ve done the innovation and design work to carry us through the next 10 years,” Colligan concluded. “Our goal is to become the leading platform player in the world.”
Article updated Feb. 12.

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