Palm grabs larger market with focused message

To achieve cool status in the mobile-device market, Palm touts not only the cutting-edge tech of its products, but also their functionality. And new consumers are listening.

To achieve cool status in the mobile-device market, Palm touts not only the cutting-edge tech of its products, but also their functionality. And new consumers are listening.

What do a Fortune 500 CEO and a 16-year-old girl have in common? To Palm, everything.

Both represent the future for the company, as it continues to diversify its product line and audiences. Not that business executives are a new audience for Palm. But the Sunnyvale, CA-based company wants both executives and teenagers to know that it will be the one to help them find important information quickly, whether that CEO is accessing e-mail on her Treo 650 Smartphone or the 16-year-old is looking up friends' phone numbers on her Zire handheld. What's important is certainly relative, but it's also irrelevant, as Palm believes that each and every customer's information is important.

That has been the company's focus since it first days in 1992 - helping customers access important information quickly - and it has always understood the value of that brand promise.

In 2003, Palm spun off its software division, known as PalmSource. As part of that spin-off, Palm changed its name to palmOne. But in May, the company spent $30 million to acquire the rights to its brand name, changing back to Palm.

"Our research shows that our brand is the name that resonates the most in this market," explains Marlene Somsak, VP of corporate communications. "So we're working very carefully to expand the brand attributes to all of our products. We live our brand here. It's in everything we do - how we design our products and how we create a user experience."

Growing pains

As the traditional handheld market shrinks, and the mobile computing/ smart-phone market explodes, Palm finds itself at a crossroads. While its brand is ubiquitous, it's also more closely affiliated with the shrinking market, not the growing one, says Rob Enderle, principal analyst with the Enderle Group.

"They're in the PDA market broadly, with several products," explains Enderle. "In the phone market, which is their future market, they have only one product, the Treo. They're strongest where the growth isn't and weakest where the growth is."

Palm's brand is one of its most valuable assets, adds Enderle. Palm has high visibility and strong brand recognition, and the company now needs to leverage that into those growing markets or risk losing brand equity.

Which gets back to Palm's efforts to reach a broader audience. For much of the company's history, its products have largely been seen as tools and toys for the business executive. But if you look at the company's recent press coverage - in Glamour, Ebony, InStyle, Parenting, Good Housekeeping, and Cigar Aficionado - that's no longer the case.

"We have been recognized for 10 years for popularizing the handheld category," says Jim Christensen, director of PR. "We now want to make sure Palm is synonymous with mobile computing."

The company places great emphasis on the Treo, the smart phone Palm acquired through its merger with Handspring in 2003, which a June 2004 article in Business 2.0 heralded as making Palm "cool" again. But the same article wonders if "the company can keep from losing it again."

Palm has no intention of losing its cool again. Cool counts for a lot in these gadget-obsessed days. Just look at the iPod and Motorola's Razr cell phone as examples. Palm's first step to keeping its cool is the LifeDrive, a wi-fi- and Bluetooth-equipped handheld with a 4 GB hard drive that expands the handheld from the realm of address book and e-mail into digital photos, videos, and music.

But innovation itself won't sell Palm's products, says Christensen. The core elements of the company's communications for any product, or to any audience, are that Palm's products will help you do whatever it is you do better, whether that's having more fun or increasing productivity.

"If we're out innovating, but not delivering a product people want, we're not meeting their needs," says Christensen. "We need to deliver technology that can be easily used. The customer is more important than technology for technology's sake. We focus quite a bit on innovation, but it's on things that will deliver value to the consumer."

Reaching wider audiences

As the market broadens beyond the handhelds of yesteryear and beyond business audiences, Palm is looking at different ways to reach these growing audiences.

"PR plays a really broad role in the marketing mix," says Rose Rodd, director of marketing communications. "It helps us expand the kinds of markets we are going after, whether that's a less tech-savvy audience, a more female audience, or a younger audience. And we're finding new ways to reach those audiences. We went on a home-shopping channel and sold several thousand units. We sold out in hours what was supposed to last for days."

Certain attributes of the messaging need to stay the same, says Somsak, whether Palm is talking to Time or Teen Vogue. This includes the message that Palm helps people get to important information quickly.

Much of Palm's outreach is hands-on, Somsak adds. When Palm embarks on a media tour, the company takes not just its products, but also competitors' products so it can sit down with the writers or reviewers and give them a hands-on demonstration.

The company knows that hands-on is also important to customers, who face a dizzying array of choices. That's why Palm has begun opening retail stores in airports and shopping malls. And even if customers don't buy directly from these stores, the company has found that they walk away with enough incentive to buy a Palm product later. Palm's research shows that 31% of the shoppers who stop in at one of Palm's 14 stores make a purchase from other retail partners.

Palm also embraces viral marketing, tapping in to user groups around the world that are dedicated enthusiasts and are often brand ambassadors and influencers. Palm encourages an open dialogue with these users to discuss what they like and don't like about handheld devices, which not only helps Palm with development of future products, but also with marketing.

The company's five-person in-house team has worked with its AOR, A&R Partners, since the company launched its first Palm Pilot in 1995. Palm also works with Dixon Communications on outreach to the education market.

A&R senior partner Maria Amundson says Palm's focus has changed considerably over the years. The first few years were dedicated to the tech trades and gadget magazines. As its product line and audience diversified, Palm's messaging became more focused.

"That's the strength of Palm's brand, that people know it stands for products that make your life easier," says Amundson. "And that carries over, whether we're focused on consumer media or verticals, such as financial services and healthcare."

As Palm courts a more divergent audience with a wider array of products, it's also finding itself competing against a new slew of companies. In the handheld device market, Palm is still kind of the shrinking hill against the likes of Hewlett-Packard, Dell, and Acer. But in the mobile converged-device market, Palm finds itself up against Nokia, Research in Motion [maker of the BlackBerry], and Fujitsu.

And as such, market share is harder to discern. While Palm remains the market leader, at 32.6%, it's a different story with converged mobile devices, which have the features of a mobile phone and a handheld device. So while Palm has 4.6% of the global market with its one smart phone, according to IDC Research, Nokia has 64.5% of the market, as all of its products are phones.

Yet such comparisons are unfair, says Christensen, as it doesn't reflect all of Palm's offerings or that not all mobile devices are created equal and that not all are competing products.

IDC Research analyst David Linsalata agrees that not all converged mobile devices directly compete. But, like Enderle, he says that is where the market is growing, and Palm needs to leverage its brand and success with the Treo to make inroads.

"PR has kept the Palm brand meaning something," says VP of marketing Page Murray. "PR helps us take the brand out to places where we have never gone. Our single most important asset is the brand. It's taken us beyond the rich geek crowd into the mainstream. PR weaves the story that says, 'The future is mobile computing, and this is what Palm brings to it.'"

PR contacts

VP, corporate comms Marlene Somsak

Director of PR Jim Christensen

Senior manager of PR Jimmy Johnson

PR agencies A&R Partners, Dixon Communications

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