Saturday March 10, 2007
Saturday March 10, 2007 Check out the article "Learning From Palm's Pain" in the Wall Street Journal from Tuesday, March 6, 2007. I am not a big reader of the Journal. Really only read it while traveling as Avis puts one in the car. So I don't know the writers there or in this case the source. The article says the column is written by breakingviews.com (an online financial commentary site).
But back to the article. In short, the case they are making is that Palm is doing poorly and has lost market value because of a critical mistake in their strategy. They have not created a closed system and therefore don't have a lock on their customers. It says "In a nutshell, Palm failed to build competitive barriers around its devices, so consumers weren't locked into its products. The Palm Pilot became a dinosaur once cellphones could store contact details and other information."
While the last sentence may be true, the I completely disagree with the first. Proprietary systems do give a company short term protection, but ultimately the market forces choice and open systems. Some examples.
AOL (American Online) created a closed system, built up a huge number of subscribers and locked them in. But they have since come crashing down to earth and recently opened up their system in order to compete with Google and Yahoo.
RIM (Research In Motion) is one of the examples they use in the article. They have done well with an email client. I believe they will ultimately fail as we all want access to our email from multiple devices and we want to chose the best device(s) to do this.
Music downloads is one of my favorites. First the record companies tried to avoid the whole concept. They didn't get involved and just hoped that it wouldn't happen. It did so they tried to sue anyone who distributed music. That failed so they have been signing agreements and DRMing (Digital Rights Management) music. This is starting to fail as it limits what devices you can play the music you purchased.