Palm's Pre faces challenges to stand out in market

Telling tales of small companies taking on market leaders or two heavyweights battling for dominance have long been a staple of business journalism.

Telling tales of small companies taking on market leaders or two heavyweights battling for dominance have long been a staple of business journalism. But the technology sector, with its culture of innovation and out-doing the competition, has bred a news culture that is particularly prone to drawing upon these “David and Goliath” or “clash of the titans” storylines.

Most recently, Palm's yet-to-launch Pre smartphone has faced a slew of various media coverage that compared it to the smartphone innovation leader, Apple's iPhone. Bloomberg predicted that Pre's sales would disappoint against the iPhone's. Many other outlets, including CNET and The New York Times, have also made outright comparisons.

Yet Lynn Fox, VP of corporate communications at Palm, told PRWeek the company is eschewing the position that the Pre is taking on the iPhone.

“As we've said before, we aim to deliver a killer Palm product, not an iPhone killer,” she says, via e-mail.

Regardless of how Palm wants to be seen, comparisons will be made.

The pull for the media is that the business sector is ultimately about market share, says Peter Burrows, senior writer for BusinessWeek, who has covered the Pre.

“This is about dominance – you can only have one market leader,” Burrows says.

Rather than trying to squash that competitive focus, Palm will need to work to leverage the kind of added exposure that comes with going up against Apple, while still telling its own story – one that includes a possible turnaround product for the company, regardless of whether the sales figures near those of the iPhone.

Palm plans to demo the phone for Howard Stern after the radio jockey said his Treo was "old school" during his show.* Fox notes Stern is a “long-time Treo user, so we are meeting with him to show him our latest innovation.” But she adds, “Our interest in Howard is not a reaction to his comments about any other product.”

Vince Sollitto, VP of communications at search engine Cuil, knows firsthand what can happen when a company takes on a market leader. Its launch faced backlash when it was positioned as a “Google killer” in the media. He suggests Palm was smart to “be first to say they're not taking on the iPhone,” and notes the company “has to... stress its message and to inoculate itself against hype.”

But taking a little risk can pay off.

When Mint.com, a free, Web-based personal finance service, launched in 2007, the company courted media that would compare its offerings to Intuit's Quicken software and Microsoft Money.

Donna Wells, CMO at Mint.com, acknowledges that overtly taking on market leaders can be a risky PR strategy. But for Mint.com, the strategy was followed by a growth spurt and the service now has one million users, according to Wells.

“It could have backfired,” she says. “But we were confident with our pre-data and we knew we'd be aggressively rolling out new features... So we felt the PR strategy would have legs that would stretch.”

This strategy reached new heights last month when Intuit's lawyers sent a letter to Mint.com that appeared online. The letter asked for supporting data of Mint's touted growth.

“The interesting part of that experience was how the people on the Web and blogs reacted [to the published letter],” Wells says. “They thought Goliath was trying to bully David. People don't like that.”

Andy Getsey, cofounder and CEO of Mint.com's AOR Atomic PR, says the strategy referenced competitors without being arrogant.

“There's a difference between drawing a parallel and a small brand attacking a big brand,” Getsey notes.

If Palm positions its Pre as a “resurgence” product going up against a big brand, it could appeal to consumers as the “quintessential American tale,” adds Todd Defren, principal at Shift Communications.

CORRECTION: A previous version of this article stated that Palm had sent Howard Stern a copy of the Pre to test out. That is incorrect. The company plans to demonstrate the phone to Stern.

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