Palm Incorporation, a company which once defined an industry is now a
history. What went wrong and why it happened all that we can now see in the
hind-sight. In the mid-1990s, the firm developed the first successful hand-held
on the market. The 1996 launch of the Palm Pilot moved PDAs from introduction
to growth and transformed the industry, as Palm offered a simpler unit, with
improved functionality, e.g. the ability to link and synchronize information
between the PDA and the office-based PC and improved pen-based technology. In addition, design innovations,
programmability, and better battery power management transformed PDAs into
convenient productivity tools, which significantly accelerated user demand.
With the sleeping market suddenly increasing, other firms tried
to imitate Palm’s new concept. As a result, Palm lost market share to
Microsoft’s Palm PC. Not only did firms try to copy Palm’s success, but
technology also advanced rapidly in all fields relevant to computer,
telecommunication and PDA industries.
Competition grew tense. Microsoft and Sony experimented with
pen based PC’s called Tablet PCs which could be operated with a stylus. Firms
like Motorola and Nokia sought new ways to enhance their mobile phones. Slowly
but steadily, simple devices such as the early Palm hand-helds were driven out
of the market.
Palm made a lot of mistakes in assessing the external
environment which led to its downfall. They prolonged their decline of the PDA
for a long time. Instead of accepting defeat and moving out of the market, they
kept on fighting for their position. They tried to shift from their core
competence to the software market which led to a lot of wastage of money and
resources. Another weakness was the slowing pace of innovation and the lack of
coordination between marketing and production at Palm. By the time they
realized that demand for PDAs no longer existed, the world had moved on to
smart phones. Their timing of entry into the area of smart phones was wrong since
there were bigger and better players out there and Palm was already behind
competition. Their pricing strategy also did not help since they were losing to
competition.
Palm, which started out as an innovator and a leader,
completely dissolved over time. Changing some of their strategies could have
helped Palm stay in business. When they realized that they were behind, they
either colluded with their competition or collaborated with larger players like
Microsoft which had the capital and technical know how to innovate on both
software as well as hardware front. They could have kept innovating radically
knowing that the market would catch up, instead of sitting on the success of
their PDAs or they could have just accepted defeat and moved out of the market.
They could have explored other emerging markets instead of just the US market
and probably recovered their losses.
In the technology field, you can’t stay on top or be the
market leader for long and Palm Inc., not realizing this fact plus the mistakes
that they made led to its final downfall with HP acquiring most of its business
by 2010.
Contributed by:-
Gurleen Dua
Section A
Strategic Management
Class of 2013-15
Contributed by:-
Gurleen Dua
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