Migration Season

I have been hearing lots of predictions about the growing trend of people moving up from feature phones to smartphones, and I have been paying more attention since we introduced the Palm Centro smartphone back in October. Analysts also expect more people to be purchasing smartphones in the future as opposed to traditional mobile phones. In fact, according to analysts at IDC, smartphones accounted for 11% of all mobile phone sales in 2007 in the U.S., and this is expected to increase to 36% by 2011.*

Why the shift from feature phones to smartphones? I think it's because people increasingly want to be connected to their friends, family, colleagues and their online lives - and it's getting easier and more affordable all the time. Cooler form factors and fun colors don't hurt either.

I recently sat down with Stephane Maes (Palm's VP of Product Marketing) to get more details about this trend and what it means. He talked about how as smartphones become easier to use and more affordable, we will see new groups of customers move into the market - particularly younger adults (20-35), women and people with lower household incomes. Stephane also shared with me some interesting early registration card data for Palm Centro purchasers that supports this trend, including:

• A large majority of Centro customers are stepping up from traditional mobile phones. In fact, 75% of those surveyed had previously been traditional mobile phone users.
• Almost double the number of women (now 38%) and more than double the number of people under 35 (now 52%) are among our Centro customers, as compared with our recent Treo models.
• Affordability is making a difference, with nearly three times the number of people with household incomes under $75,000 among Centro customers (now 46%).
• People are signing up for and using the data plans in higher number than ever before - a full 95% of Centro customers surveyed bought data plans.

The market is still young, but it's encouraging to see it opening up new customers to the benefits of smartphones. It will be fun to see what new kinds of applications and uses come from this migration. And it's a nice sign for Palm in our efforts to reach out to new customers.

Check out the video interview with Stephane, and let me know what you think.

-Paul Loeffler

*Source: Worldwide Converged Mobile Device 2007-2011 Forecast Update: December 2007

Comments

[TomOnTime]

All that complicated analysis sounds like hype to me.

The real reason is that there is a certain segment of the world that will always pay about $200 for a phone. That meant 15 years ago they wouldn't own a phone. 10 years ago they would buy a plain phone. 5 years ago they would buy a Treo. And today they're ready to buy a iPhone.

The sad thing is that the Treo 700p is better than the iPhone for Time Management stuff, and faster data access for the web. It's a shame that Blazer is the 2nd worst web browser in the world. It's a shame that Microsoft was able to distract you for a few years with their carrot and stick routine which was amazingly effective in getting you to lose all your good engineers, muddle your marketing message (Why doesn't anyone read Merrill R Chapman's book??). Microsoft does this to competitors all the time: if you succeed Microsoft sells more licenses; and if you fail Microsoft has eliminated a competitor.

When I take the train to work each morning I'm amazed that hardly anyone has an iPhone, a number of people have a Blackberry, but nearly everyone has a Treo. It just works.

Too bad it won't be around 5 years from now.

[tk421]

The Centro is a really great move for Palm. It also shows the way that they are headed: bottom level smartphones that compete more with the feature phones than the likes of the iphone.

As a platform for third party applications, it's rather weak. The screen is way to small to do any serious work, and most of these first-time smartphone buyers will probably not even bother with those apps. For them a smartphone is not a mobile computer, just a better communication device. A much better out-of-the-box solution.

This is a really different ecosystemn than existed for Palm OS in the old days of the T3 and PalmTX, but with the arrival of OSX in the mobile space, it is a really good strategy for Palm.

I will always prefer two devices. So I'll probably wind up getting a Centro, and then the rumored Apple PDA which will use the same OS as the iphone and iTouch. Then I'll have a real mobile computer and a great little phone that can do more than just phone calls.

Great move Palm. Now I can't wait to see Palm OS2. You're in a good position to succeed now, just as a different style of company, that's all. (More as a phone company than a mobile computing company.)

[qrius]

hardly anyone I know owns a treo. most of them own regular phones, or blackberries.

Treo is so 90s now!

that said, I'm giving Palm one last chance as I wait for Palm OS II. If it's delayed yet again, Palm, you can kiss even your most loyal fan good bye.

[Chad Garrett]

I liked that interview. Of course it is hype, but I like to see spin regardless. I would enjoy more of these types of videos. A candid video with Ed would be cool. Perhaps you could have a post that would allow us, the Palm community, to ask questions and Ed replies.

Good work on the blog Paul.

[Mark Jacobson]

Seriously, does Palm have a clue at all?

I just saw a news link that has some statistics stating Palm is dead last at customer satisfaction. When a product company has this bad of a customer resentment, it has to be the products.

In short, they suck, change them and make them not suck. I use to be a Palm customer back when the M130 was hot stuff. Since the T|3 I have seen nothing that even begins to appeal to me. In fact every product since has no sex in it at all. The T5/X was a DOWNGRADE from the T3 and the Treo's are frustrating to use. Not to mention mobile data on a Palm product is like putting premium gasoline into an old car that shoots black smoke out the tailpipe.

[Troy]

To bad the latest Centro, still can't sync with Vista 64 release OVER A YEAR AGO! Looks like iPhone or a non-Palm Windows Mobile device.

[Amy Masterson]

I'm curious why more women? Is it just the colors or the price maybe? I would think it would be something else besides just those two reasons no? Do you know how women are using it and for what purposes?

[Joe Shuster]

Palm is turning into a huge joke. Right here is where your grave is being dug....users are telling you what they NEED, and you continue to ignore them. 64 bit drivers...anyone out there listening? You think putting a new Treo out will do you a smidgen of good when your latest and greatest isn't compatible with your desktop/laptop OS? And the only thing Palm has to say is (and this is now well over a year old): "64 bit Windows is not supported". So what are you doing about it? Are you even aware that there are 64 bit operating systems? Are you living in caves? Hope you've all updated your resumes (and may I suggest leaving "Palm" off...it won't really help in the interview process).

[Stephen P]

I'm off topic. I have a 650 on AT&T. I want a smartphone with the Palm OS which operates on the GSM system using UMTS+. I don't think such a phone exists yet. If I'm wrong, please point me in the right direction. I feel like my 650 is going to need replacing soon and really like the PALM/GSM combination, but don't want to give up UMTS option (or whatever the 3G+ networks are called). Thanks.

[Pat]

Come on guys...I am faithful Treo user business woman...I am nursing my Treo 600 along because I refuse to leave TMo for either Sprint (yuck CDMA), Verizon - way too pricey and now AT&T( won't go back to them, customer service treats customers like criminals)...I have found the 650, 700, 755p and so on, experiments on the original design...you really haven't improved on that tiny screen...so on and so on...too much money for not enough improvement...so let's get the Centro out to TMo asap...at $99 I can wait for 4g and Palm OSII and then make my decision whether to stay or leave...the much vaunted SDK for Iphone needs to be evaluated for BUSINESS use and WinMo is too complicated and makes my antiquated Palm OS look good...blackberry's, proprietary OS and the recent outage and no stylus won't do...so what gives in getting this patch phone (Centro) to all providers at a cheap price till we see if you produce a winner with Palm OSII for 3g and 4g...if not, you have lost another faithful Palm user to something the competitors have done...

[Thomas Flagg]

I certainly do want to go from my mere cellphone to a smartphone, and would greatly prefer to use the Palm OS, for its info-processing features. But the other features available in the phones that run that OS are lacking compared to what's available in huge variety for the Win Mobile OS: no Palm Treo has Wi-Fi even, forcing us to go with expensive EVDO networks even if we don't need them. And I'd really like to be able to use a Palm Treo to play good music, using fine headphones (stereo bluetooth maybe?) and better formats than MP3. And if you'd enable high capacity memory cards, we could actually store that music (or videos, etc.) and you could even compete with AT&T's new things.
GPS would be nice, but at least let us use Wi-Fi.
TF

[Serge Lescouarnec]

I wondered if the 'Centro' is a good tool for mobile blogging.

Any way I could test it for my trip to South by Southwest Interactive and my 'Just Over 50 and Not Dead Yet' (www.pushing50.net) panel there on March 8?

Take care

Serge
http://www.sergetheconcierge.com
'The French Guy from New Jersey'

[David Meyers]

Congratulations, with your focus on Smart phones, you have abandoned the user base that was only looking for a reliable, easy to use, personal digital assistant. I had been a loyal Palm user for 10 years, starting with a Palm Professional and upgrading with every major technology improvement. My Tungsten C (TC) has been a champ; I happily refer to as my “second brain.” I had been patiently waiting for the next great Palm PDA and all I see come out of your company are Smart Phones. I already have a cell phone, paid for by my company – sorry it’s a Blackberry. But, a Blackberry may be great for text email and syncing with my office calendar, address book, and task list; it doesn’t have the functionality that my TC had. Not only can I view Word, Excel, and PowerPoint documents, but I can create them on my TC. I can use the scientific calculator, read e-books, check the spelling or definition of words, and store my multiple passwords in an encrypted file on my TC; and not be able to on my Blackberry. Recently, I purchased a new laptop; it came with the new Microsoft Operating system Vista. Vista and my TC don’t play well together. I went to the Palm website to find how to fix this. What I found was that Palm had deserted my TC and provided no solution. Well I had been waiting for a PDA that supports the 802.11 a/b/g protocols that could store more than 2GB of data and could rotate its screen for those Excel spreadsheets. It finally arrived, unfortunately for you it was not a Palm. So after 10 years of being a loyal Palm user, I have migrated over to the Pocket PC world with an iPAQ 111. When you start losing customers like me, you should seriously consider how much longer you as a company will survive.

[RYan]

It's actually fairly decent for moblogging depending upon which blogging platform. Vox is a good experience, but it's not the best for straight blogging. Typepad is a little better if you're or LiveJournal aren't bad either.