Palm not for sale: CEO
Palm Inc Chief Executive Officer Ed Colligan says he is ignoring calls to sell the phone maker and is focused on winning back sales lost to Research In Motion Ltd and Nokia Oyj.
"I can't sit here and worry about that," he said in an interview at Palm's Sunnyvale, California, headquarters. "I can only worry about how the business is performing and what can we do as a team to do better, to get our products out faster, to drive for higher reliability, to grab more market share."
Palm's Treo, introduced in 2002, helped create the market for handsets offering functions such as e-mail, and forced Research In Motion Ltd to add a phone to its BlackBerry messaging devices. Since then, Research In Motion has introduced products faster, and Motorola Inc and Nokia challenged Palm with cheaper e-mail phones for consumers.
Colligan is under pressure to produce a hit device to combat the BlackBerry as well as products from Motorola and Nokia and Apple Inc's iPhone, coming out in June, said Casey Ryan, an analyst at Nollenberger Capital Markets in San Francisco.
"They need to come up with more innovative devices to compete," He rates the shares "neutral" and doesn't own them. "That's what they used to be known for."
New system
Palm spent the past two years copying a design from larger rivals including Nokia that includes a standardized core to cut production costs and get handsets built faster. Using the same base in all its phones will let Palm create a new handset in nine months, down from as much as two years, Colligan said. New devices built this way go on sale this year, he said.
Palm will discuss its strategy with investors in New York today. Palm shares, which have risen 25 percent this year on takeover speculation, fell 20 cents to $17.62 in NASDAQ Stock Market trading last Thursday.
The design change allows Palm to use fewer parts and buy larger quantities of a single component, cutting material costs 30 percent, said Stephane Maes, a director in charge of Palm's product lines. The company will also save on development costs as individual devices won't be built from scratch.
That may open up markets beyond business users. Palm may be able to sell phones for as little as $99 with a contract, down from as much as $399 currently, Maes said.
Survival depends on Palm's ability to create devices for making calls and sending e-mail that competitors can't replicate, said Tony Carbone, an RCM Capital Management analyst in San Francisco. The company may be too small to do that, and RCM won't buy the stock until Palm proves it can, he said.
Bloomberg News
(China Daily 04/10/2007 page16)
