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February 8, 2005
Palm: How to Lose Fans and Alienate Developers
As reported by Gizmodo, PalmOne has added $100 to the price of its unlocked Treo 650 GSM only a few days after releasing the product. Most likely, it did so under pressure from the cell phone carriers. I was lucky (or obsessive) enough to get my order in at the original price, but I'm less certain now that I'll want the device when it arrives.
I was willing to pay a premium over the Cingular-locked-subsidized version, because I'm tired of the petty tyranny of cell-phone providers who want to control what users can do with devices they've bought. After dealing with the TMobile-constrained Sidekick, I wanted a device that was open and customizable. Once I've paid for the service, I should be able to choose what data to send and receive, and how to use it.
What PalmOne doesn't seem to understand is that its customers are buying a platform, not just a phone. Those who buy the $400-600 Treo instead of a $100 phone (free with cell servitude) buy it for the rich set of applications available -- many of them developed by other users.
I don't develop for the PalmOS and probably never will, but I benefit from the "virtual network" around an open platform because I can add any of its array of third-party applications. Since every application written makes the platform (marginally) more functional, every developer who joins the network adds potential value. That value redounds to Palm -- without any extra work on Palm's part -- because customers still need Palm hardware to take advantage of this "network."
Raising the price of the full-functioned unlocked Treo turns away those user-developers. By making it more expensive for users to develop for the platform, Palm makes the device less attractive even to the non-developers. By alienating the "alpha-geeks," in Tim O'Reilly's term, Palm has hurt many more than the few hundred people who might have bought the unlocked Treo. It hurts every user of the platform, and its own bottom line. I hope I haven't just bought a $600 paperweight.
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