Strategic Analysis of Palm Co

Subject: Strategy
Pages: 5
Words: 1519
Reading time:
6 min
Study level: PhD


The communication business has evolved from customary telecommunication systems. The older methods of communication suffer unpredictability and result in inconveniences for users. The business people then resolved to invest in research efforts to develop better communication technologies. Presently the marketplace is bursting with exceptional and extremely sophisticated communication gadget, which essentially includes technologies that enable wireless communication including cell phones and moveable computers. Cellular gadget exemplify that innovation in technology is a true example of globalization. Today people communicate with their folks from any part of the globe. The phones emerge in varied forms including androids, smart phones, and camera enabled phones. The present smart phones are amongst the extraordinarily liked handset types. Indeed, smart phones permit users to be entertained in audio and video media since the phones encompass multimedia capabilities. This makes the smart phones appreciated because they are dependable communication tools and entertainment devices. Palm Inc takes top position in the stylish handset technology. This article attempts to scrutinize the business strategy of palm, Inc. “identifying its brief history, corporation profile, marketplace competitors, chances for growth and industry threats”.

Overview of Palm, Inc

Palm, Inc. is a noticeable corporation providing itinerant computing solutions. The company primarily deals in “Personal Digital Assistant” based mobile computing and handheld computer services The products enable consumers to control mobile computing towards accessing and sharing information. The company has close to 21 subsidiary companies (Palm Inc, 2009). The company was crafted in 1992 as Palm Computing, Inc. In 1995, U.S Robotics bought Palm, Inc. at a cost of $44 million. In 1996, the business introduced into the market its initial handheld computers. In 1997, 3Com acquired U.S Robotics; therefore, Palm, Inc. became its collateral (Los Angeles Times, 1998). In 1998, most of the Palm beginners, discarded the company to constitute a rival company named Handspring, in 1999, 3Com made public its plan to separate Palm, Inc. from its business and in response Palm Computing Inc. replaced its name with Palm, Inc. It underwent restoration in Delaware in December 1999. Palm, Inc. became an autonomous business through unrestricted trade by 3Com on March 2, 2000 under the ticker emblem PALM. In December 2001, Palm created PalmSource, Inc., in 2003; PalmSource bought Handspring, Inc., and named itself palmOne, Inc. They later acquired PalmSource’s with its brand name and symbol in May 2005 (Shelly, Vermaat, and Quansey et al, 2008). The company finally chose its original name, Palm, Inc. or Palm in July 2005. Subsequently, in April 2010, Hewlett Packard, HP acquired Palm Inc. at a cost of $ 1.2 Billion (Fulton & Conneally, 2010)

Corporate Strategy

Palm, Inc. corporate strategy is to become the greatest global provider of mobile devices. Currently it focuses on Smart phones regarded as cell phones with a great quality on voice, data, and internet abilities. The phones are able to run complete OS software offering a consistent edge and platform for appliance developers. The company also banks its hope on the growth in development of the Smartphone to position itself to boost its shares in the market. The company is escalating its market leadership by creating more branches. Another strategy the company uses is licensing other players to use its hardware or software. The company distinguishes and diversifies its products by exciting design and faultless combination of hardware, software in addition to services believed to bring a delightful consumer experience it also strategizes, to build a large Palm webOS network of application creators that offer clients with a variety of products and services to boost its palm devices. It is also building a trademark identical with inventive and automatic mobile devices. It also continues to put in place an elastic, outsourced company model.

To create demand in the market and occupy a larger market share, Palm, Inc. continues to launch its products without assessing the market situations. This is seen when it launched its new model of handheld computers the m500. In its inventory were old and novel products. The old products experienced a sharp decline in sales and new product failing to capture the whole market. The situation led to a decline in the company’s revenue. Apparently, Palm, Inc. marketing strategy is miserable, relying on third party sales agents. Palm, Inc. litigations are also a hindrance to its success including lawsuits on brand name, licensing, patent among others (Bagley & Dauchy, 2008).

Competition and Competitive Analysis

In a perfect marketplace where players are offering similar services, the companies work tirelessly to meet their client needs. At such times, companies try to overshadow each other in order to gain consumers loyalty. Palm, Inc. faces sturdy rivalry in the mobile phone industry, which is growing quite fast technologically (Associated Press, 2005). Palm, Inc. notes the factors upsetting the sales for their smart phones as market distribution, prices, merchandise superiority, time taken to reach markets. The rivalry for market control in cellular phone industry lies on the fact that people consider what devices to purchase before settling on a Smartphone. This means that mobile products such as “pen and keyboard based devices, converged voice and data devices, laptop computers and notebooks” turn out to be competitive against smart phones. Furthermore Palm, Inc. smart phones face stiff competition from other products such as “iPods, MP3 players, digital cameras, digital storage devices, handheld gaming devices” among others. Palm, Inc. competitors are mainly the companies dealing on mobile-based products whose use substitutes the need for smart phones. These companies include “Nokia, LG, Motorola, Samsung, High Tech Computers, Dell, Microsoft Corporation, Hewlett Packard, Apple Computers, Sony Ericksson, Philips, Research In Motion” among others. However, Apple, Hewlett Packard, and High Tech Computers will be discussed as chief competitors (Associated Press, 2005).

Hewlett Packard, HP is a technology business outfit functioning in over 170 nations worldwide. The main interest of the company is helping its product users solve major communication technology problems and challenges. Established in 1939, HP is the largest IT Company, with a wider market and stronger financial background. The company’s best selling products include Laptops, Desktops, and All-in-one PCs.

Apple Inc was crafted in 1976. Its best selling products include iPhones, iPods, Macs, and iTunes (Apple Inc, 2010). This is an indication of people’s interest in pocket computers. The novel IPhones with built in music and players is slowly eliminating the existing gadgets.

High Tech Computers is also a competitor of Palm, Inc. Established in 1997, HTC Corporation is among the largest companies in the handset phones industry. Established in 1997, their product consumers occupy its core interest. It therefore seeks to make the lives of people better by creating pioneering phones. The best selling products for HTC is its HTC Desire cell phone, which is android based.

A company’s success lies on how it addresses concepts pertaining to “strengths, weaknesses, opportunities, and threats”. Palm, Inc. efforts to gain market control lies on exploiting its opportunities while critically handling threats. The company has opportunities, which can enable it spur its growth including its capability to develop excellent products and introduce them into the market, For example, during the first quarter of 2010; the corporation launched Palm Pre, their first Smartphone using Palm webOS mobile. The company enjoys practicable advantage of market leadership than its competitors; its May 2010 report observes that, launching its novel Palm webOS, the company’s viability to compete for market control is certain (Palm Inc, 2009). The technology on smart phones is still developing and Palm, Inc. is in a formidable position to exploit the growth opportunities and expand its business. The company still has more markets to access.

Palm, Inc. weaknesses include failing to build and launch novel merchandise and services effectively within timelines. This hinders market competition further reducing revenues. Its novel product “Palm webOS mobile phone platform” faces severe competition. Apparently, consumers or third party sales agents may not fully embrace it. Its products could be defective thus affecting the company’s name, sales, increased repair expenses, guarantee claims, lawsuit, and negative response. There are fears of unfavorable economic changes upsetting its liquidity. Lack of effective competition can result into reducing the value of its products. Products can fail access the market because they rely on third party sales agents. Some products could also be substandard, negatively influencing level of competition and revenue generation. Employees also breach confidentiality policies by leaking business information on company operations. Outsourced personnel for services such as e-commerce internet, telemarketing, and customer care could damage business in case of misunderstandings.


Palm Inc. implements its strategies with the aim of realizing its goals. Since establishment, the company has changed its name severally with modest success. The company also produces superior devices, which have enabled it to enjoy market leadership. Its top management has made unwise decisions, which impacts negatively on its business. The company faces competition in the market from other entities in the mobile devices trade. It appears that that the company’s threats are significantly affecting the operations of the business. The corporation equally faces constraints pertaining to liquidity. This led to its take over by the giant IT Company Hewlett Packard in April 2010.


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Associated Press. (2005). PalmOne reverting to Palm Inc. Desert News.

Bagley, C. & Dauchy, C. (2008).The entrepreneur’s guide to business law. 3rd Ed. OH, Ohio: Cengage Learning.

Fulton, S. & Conneally, T. (2010). HP to Acquire Palm for $ 1.2 Billion. Betanews.

Los Angeles Times. (1998). SEC Review Prompts 3Com to Restate Results.

Palm Inc. (2009). Form 10-K, Annual Report.

Shelly, G. Vermaat, M. Quansey, J. Sebok, S. and Webb, J. (2008). Discovering computers 2009: complete. Massachusetts, MA: Cengage Learning.