Palm has made its sharpest move in years with a cheapie smartphone, the Centro.
It's aimed at an overlooked (and potentially very lucrative) market: the low end.
Palm does not look like an impossible takeover target if this model clicks.
Position: None
Palm's Centro
Palm has fallen far behind in the feverish race to pack ever more sophisticated features into ever slimmer packages for $300-$700. Thursday, the company did what it had to: migrate radically down-market with a kooky, fun $99 smartphone. It's the complete opposite of Nokia's (NOK - commentary - Cramer's Take) N-95 and Apple's (AAPL - commentary - Cramer's Take) iPhone -- and just might be a big hit for a company that could be transformed by one hit.
Something New
Time stood still Thursday afternoon around 2:30 p.m. EDT. Palm was announcing a new product, and expectations could not have been lower. Last spring's pitiful search for a takeover candidate was followed by the announcement of the criminally dumb Foleo mini laptop, which was aborted before launch. Things couldn't have gotten much worse.
And they didn't. The new device from Palm is something completely new and potentially groundbreaking. The Palm Centro is a youth-oriented cheapie phone with a unique mix of high- and low-end features debuting below $100 with a very reasonable data plan ($15-$30) from Sprint (S - commentary - Cramer's Take).
It has a surprisingly good, 320x320-pixel color touch screen that is actually better than what many expensive smartphones currently offer. It offers high-speed mobile data support with EV-DO and weighs a tolerable 120 grams. The camera quality is sheer horror at 1.3 megapixels, but the overall feature mix is great for the price category of $100 smartphones.
The design of the Centro is very, very clever. The device has a glossy, toylike look that is defiantly out of step with other smartphones. Most of these models do their very best to look like "Minority Report" props, coolly minimalistic and professional. The Centro is the Crocs of phones: kooky, clunky and infantile.
I think that bringing the "New Ugly" design philosophy to the smartphone market is a shrewd move. Too many of this winter's smartphones go after the 35-year-old IT/business crowd. Too few reach for teens and young women looking for something whimsical, something not carried by the next McKinsey consultant you see.
Telecom Google's Mobile Honey Pot 9/21/2007 5:13 PM EDT Google can offer operators a brand new revenue stream -- an expertly designed advertising model.
At time of publication, Kuittinen had no positions in any of the stocks mentioned in this column, although holdings can change at any time.
Tero Kuittinen is managing director and senior analyst for Avian Securities, a brokerage firm specializing in technology companies. Although Kuittinen is an employee of Avian Securities the statements above are being made in Kuittinen's personal capacity and are in no way are the statements of Avian Securities, nor attributable to the company. Under no circumstances
does the information in this column represent a recommendation to buy or sell stocks. Kuittinen appreciates your feedback; click here to send an email.
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