Palm of Your Hand

I have a Blackberry. I have only had it since March, but I think it is a great tool. My youngest son loves Brickbreaker. No that is not my son in the stock picture on the left. I understand that the Palm Treo is competing with RIMM. Since PALM is on the MFI list, I thought I'd sneak a peek.

I wonder what the critics say? Here is some feedback I found:

• I utilized the Blackberry for 13 months before moving to the Treo 650. My complaints were voice level, color, and the control wheel. On the 650 I enjoy the touch screen with setting sections quick to access. In my opinion I feel the PDA function of the Palm is superior. The Treo, also has a handy download, Volume Care, that increases the voice and ring levels greatly which has been a benefit. I have read of phone shut-offs yet this has not been a problem for me.
  
• I find the palm to be a far more useful and flexible device. I have owned and used both.
• In a new report from research firm Brandimensions, the Treo has scored higher in customer satisfaction versus the rival Blackberry.

  According to the report, the Palm Treo had a customer satisfaction rating of 3.61 out of 5 versus the Blackberry which scored a 3.31. BlackBerry seems to be lagging behind," said Mark De Paoli, the author of a report. Brandimensions uses Internet forums, blogs and discussion forums to assess the buzz surrounding a product.

How do the stock values compare? PALM sells at 13x next year eps. RIMM is at 19x next year EPS. PALM almost always beats estimates by 10%+; while RIMM is more in the +5% range.

PALM is bigger than I realized with $2B in estimated sales for next years vs $3.1B for RIMM.

Now look at the PALM graph over past 3 months (I am using a new tool that Nick, a fellow blogger told me about called FastStone Capture. It lets me pretty much paste anything into Blogger as a picture so it won't change).

Now that is a bad graph. Really shows the pressure that Tech firms have been under. Down almost 40%, man why does that ring a (OVTI) bell? RIMM has held up better, down about 20%.

PALM seems to have dropped the ball in Europe per this MF write-up: (Palm's European Vacation). Palm does have over $5 cash per share (against their share price of $14+. They seem to have a decent balance sheet with a current ratio just under 2.

Looking at their income statement, their gross margin declined this last quarter as they seem to have spent more on R&D. We have seen what declines in margin have done to OVTI. I guess I am having trouble getting fired up over PALM. The biggest plus seems to be that people like their PDA. But I know at my company, we are in an upgrade cycle and we're staying with the Blackberry. I think these purchases tend to be by corporations and they will tend to stick with what has worked in the past with their systems. I think that RIMM as first mover has the advantage.

I thought after the horrible week, we could use a pick-me-up. So here is a JG quote:

"In a similar way, our level of confidence in the magic formula will determine whether we can hang on to a strategy that may be both unpopular and unsuccessful for seemingly long periods of time."

Amen to that, I feel the pain.