Colligan disappointed with Palm's earnings and disappointing Treo sales
Ed Colligan reported poor retail sales on Treo’s for the first quarter. Ed blamed a lower than expected sales volume on Treo’s due not to business to business sales, but to competition in the retail space.
He emphasized in his conference call that businesses usually do a more thorough analysis of their needs from a smartphone than retail customers who “are more easily influenced by price, fashion, or aggressive marketing”.
Hmm…retail customers are more easily influenced by price, fashion, or aggressive marketing, than business customers. I guess this means that if they did a more thorough analysis from a needs perspective, they’d be willing to pay more, creating more sales for Treo’s. Is he sure?
Let’s take Cingular as an example, or T-Mobile. Hmm, I’m looking and T-Mobile doesn’t even sell Palm Treo’s. So, guess I’m out of luck if I’m a T-Mobile customer. Cingular? Let’s see. I see a refurbished Treo 650 for $150 (with a two year service agreement), or a brand new Treo 650 for $300. That’s right, a brand spanking new Treo 650 for $300. Wait, how long has that been out? I don’t see any new model Palm Treo units on Cingular’s site. Guess I’m out of luck if I’m a Cingular customer too. Wait, I can get a brand new Windows Mobile 5 Pocket PC phone with more memory and more out of the box functionality for $250 from Cingular. On over to Sprint PCS, let’s see. A Treo 700wx for $500, or a Treo 700p for $500. Wait, I could get a Windows Mobile 5 Pocket PC phone not made by Palm with more memory and more out of the box functionality for $450. On over to the last major wireless carrier in the US, Verizon Wireless. Let’s see. Oops, Palm Treo 650’s are out of stock, but if they were in stock, I could get one for $250. Palm Treo 700w’s are $400. Palm Treo 700p’s are $400. Wait, I can get a Windows Mobile 5 Pocket PC phone not made by Palm for $300 with more memory and more out of the box functionality. So, from a needs perspective, looks like I can get more out of the box functionality at a lower price by choosing a non-Palm device. Looks like I’m out of luck from a Palm perspective if I need GSM/GPRS coverage, or I pay $100 more for the other carriers to carry a Palm device.
No, I think what he meant to say was that his sales force is more aggressively attacking the business customers because they won’t mind paying more. Relationships are more solid, business partnerships developed. Retail customers spending their own hard-earned money are more conscious about cost. Yes, I agree, retail customers are more easily influenced by cost, and they should be.