Palm: Execution Is Everything

Palm shares are on a tear this morning, rallying on the company’s fourth-quarter financials and the promise of its new Pre handset. Palm (PALM) is trading at $15.30 as I write this, up more than nine percent in reaction to the company’s claims that the Pre and Palm’s webOS are off to a strong start.

“We think the Palm Pre is by far the best product we’ve ever shipped and I am very happy with how we are managing the launch,” CEO Jon Rubinstein said on an earnings call Thursday, though he refused to disclose actual sales numbers. “We are successfully ramping supply to meet demand that is strong and growing.”

Rubinstein gave strong emphasis to Palm’s new operating system. “The most important indicator of our success is that customer response has been simply great, especially to Palm webOS. Just as Palm pioneered PDAs in the 90s, we believe it has now pioneered the mobile operating platform for the next 10 years and beyond. WebOS integrates information and services from the cloud and offers a true multi-tasking environment. We feel it takes better advantage of the benefits of Web 3.0 than any other mobile platform available today.”

Quite a claim, especially given the incumbents in the market and Palm’s history. The company has never been strong on execution, and while it’s done a great job of bringing the Pre and webOS to market, it has clearly stumbled a bit. Thanks to supply constraints, Palm may be leaving some sales on the table. And it hasn’t done itself any favors by delaying the release of the webOS software development kit.

WebOS won’t be the “the mobile operating platform for the next 10 years and beyond” unless developers are actually, you know, writing applications for it. And there are far too few of them doing that right now because Palm has, so far, restricted access to the SDK.

Rubinstein says that will soon change, though. “We are eager to expand access to our SDK but we need to do so in a measured and methodical fashion, so we can be sure we are providing a great development experience,” he said Thursday. “Over the next few weeks, we expect the program to grow from hundreds to thousands of developers and our goal from there is to make our SDK available to everyone by the end of this summer.”

OK. So Palm would rather do things right than too quickly. That’s understandable–especially if it has more products in the pipeline, as it most certainly does. Given the rivals against which it must compete, the company cannot afford even a single misstep. If it is to truly to revitalize its brand, it must execute, as Rubinstein well knows.

“My highest priority is execution,” he said. “That means delivering world-class products and customer support. Operational excellence in our supply chain management. Strong carrier relationships. Great sales and marketing. Strong back-office functions….Palm already has a foundation in all of these areas. We’ve been in this business for years. We have long-established industry relationships and we’ve successfully brought mobile products to market for over a decade. This footing can create a real advantage.”

But only if it’s managed well. So far, so good. We’ll find out how Palm’s really doing next quarter, which will more fully reflect the impact of the Pre.

You’ll find more notes from yesterday’s call here.