Palm and Nintendo: A History Lesson

Ah…its another day of analysts calling for the death of Palm. What can I say…blogs and news sites love them some bad news.

Me? I am a realist with a soft side of optimism when it comes to Palm. Why? Because they are a great company that makes great products. My belief is that that should be enough to be successful. Probably makes me naive, but honestly, I still think Palm is gonna do just fine.

All of this negative blather about Palm reminds me of a little of the death talk a few years back of a little company in Japan called Nintendo.

Back in 2003, this little company was up against two behemoths that were of such size that Nintendo couldn’t play by their rules. They had created a system that couldn’t catch a break…the sales slumped…and they had to start slashing prices. The failures seemed a bit odd as many of the games were great (including one of the highest rated games of all time), and the system had a nice group of dedicated followers. Before long 3rd party developers threw in the towel and you started seeing forum posts like this.

Sound familiar?

Now fast forward to today…Nintendo is a monster with a system that has sold more units than the XBox 360 and PS3 combined. They rake in more money than Uncle Scrooge…and I bet they swim in it too.

Is it a perfect analogy? No…Nintendo always had a little gem in its back pocket called the GameBoy that pulled them through the difficult times, but there are definitely more than a few similarities.

The point is, like video game consoles, the mobile industry goes in cycles. The good news is that mobile cycles are much faster than consoles (even I wouldn’t be pro Palm if they had to wait 4 more years before the next round). Virtually every year the mobile phone companies are forced to come out with a better product. The next cycle starts soon (typically summer), and I believe that Palm will reveal a new device (and maybe webOS 2.0) that will answer many of the things that people don’t like about the Pre. Furthermore, I doubt that Palm will be hampered by exclusivity agreements like they were with the Pre and therefore will be able to get on more carriers faster.

The simple truth is this…Palm created a foundation in webOS that is solid. Building on that, they have room to come out with a new device that can really shine. Jon Rubinstein himself hinted at the “great progress [being made] on future products”. The devices are coming…and I, for one, believe that round 2 is gonna be something special.