Palm Boss Jon Rubinstein: We Still Have a Chance to be a Major Player
When Palm CEO Jon Rubinstein last appeared on the D stage in 2009 he was bringing the Pre to market in a bet-the-company move to recover the handset maker’s long-lost glory. Palm’s new operating system, webOS, had been well received at the Consumer Electronics Show earlier in the year and the company’s share price had ascended from $3 to $10 on its promise.
Two years later, Palm no longer has a share price, having been acquired by Hewlett-Packard, and Rubinstein, no longer its CEO, runs HP’s new mobile devices unit. But with the iconic Silicon Valley company backing it and “doubling down on webOS” and a new tablet based on the OS headed to market, its future is perhaps equally as promising, if not more so.
The session kicks off with video of a previous interview with Rubinstein in which he–the “father of the iPod”–claimed never to have used an iPhone.
So, have you touched an iPhone yet? Kara asks.
Rubinstein laughs. “Oh, we’re going to go through this again? Have I used one as my own device? No. Have I touched one? Yes.”
2:58 pm: Rubinstein continues: For me personally, we have lots of people who use iPhones and we have competitive analysis groups who review competing products, but I don’t want to be tainted by another experience. I want to come at this with a fresh perspective and I think what we’re seeing now in this industry is that everyone is copying the iPhone.
3:00 pm: Sorry, we’re having some connectivity issues here….
Moving on now to Palm and its ultimate acquisition by HP.
I think we did have many of the elements to be successful. We had a great team, a great product, a great product pipeline….But I think the market moved too fast and when we looked forward we saw a very clear way to where we could get the company to profitability, but we didn’t see a way to get it to scale….We could have been a small, successful company, but I don’t think that’s long-term sustainable in this business.”
So it was an issue of scale and not the “creepy lady marketing?” Kara asks.
Rubinstein says no, though he concedes the Palm Pre could have been marketed better.
3:04 pm: Ultimately, says, Rubinstein, we just ran out of runway…. We looked at a variety of different alternatives, and at the end of the day we decided that the best thing to do was to hook up with a partner that could get webOS to scale….The most expeditious outcome was to partner with HP.
3:05 pm: What other companies were interested in acquiring you? Kara asks. Rubinstein won’t say. What he will say is that the one that made the most sense was HP. “They didn’t have a great mobile strategy, but they had the means to get webOS to scale….A company like HP needs to be in control of its own strategy….This is not ‘game over.”
3:07 pm: How badly did HP need Palm? “Look,” says Rubinstein, “HP is the largest computer company in the world…it needs a mobile strategy. And it needs a mobile OS of its own….They needed to be in this space, and now they’re very jazzed about webOS.
3:08 pm: How about the Mark Hurd scandal? Was it much of a distraction for Palm? Rubinstein says it wasn’t. Palm was relatively new to the company when it occurred and was thus unaffected. “There was some turmoil for a few days,” he says. “That’s about it.”
3:10 pm: Moving on now to Palm’s role within HP. “What we chose to do as part of the acquistion was to integrate part of Palm into HP and keep part of it separate….The engineering team is essentially separate…things like HR and finance are handled by HP….From my perspective, what we were planning on doing and what HP wanted to do were very well aligned.”
Post acquisition, says Rubinstein, as soon as we aligned our road maps, we were off and running. He notes that internal relationships with divisions like HP Labs have been quite helpful.
Will the Palm name continue? asks Kara.
[Sorry, more connectivity problems.]
Rubinstein: That’s something we’re debating. What do you think we should do?
Kara: Get rid of it.
Rubinstein: Okay [jokingly]….I don’t really have much of a connection to the Palm brand.
3:16 pm: What’s Rubinstein’s view on the competitive environment? “Look, this is a huge market. The growth is phenomenal. If we roll back three years to when I started this Palm adventure, mobile was the place to be. And it still is today. I think we still have the chance to become a major player if we do the right things.”
3:20 pm: What’s the more important device, the phone or the tablet? asks Kara. Rubinstein says he doesn’t think people will have just one device. “It used to be that people shared a device. These days, people have multiple devices. So the new question is how do these devices interact so there’s a seemless user experience across devices….The ability to have a unified experience on all your devices is very important.”
3:21 pm: The conversation moves on to carrier relationships. Rubinstein observes that AT&T is doing pretty well in the Bay Area. “Just for you,” quips Kara.
3:23 pm: And on to the Q&A. First question from Engadget’s Josh Topolsky. What’s the Palm story that’s going to make people buy your phones? How do you convince a consumer to buy your stuff when you’re competing with the likes of Google and Apple?
Rubinstein: We really do have a unique experience compared to everyone else….The other concept around this is the connected device strategy. We’re in this transition now where we’re integrating into HP, so we’re still ramping up.
3:25 pm: Kara circles back, asks about differentiation and how HP can break through all the marketing noise. Where do you think the next radical change in the mobile market is going to come from? she asks.
I think it’s going to be incremental change, not a radical. I think it’s all about bringing this vision of a more connected world to our users.
Kara asks about forthcoming webOS devices.
Rubinstein gives the standard answer: “Stay tuned.” But he added, “This will be a very different conversation next year.”
3:25 pm: And that’s it.