Contrasting Apple and Palm in Preparation for the Return of RIM

Rob Enderle

This is a big week for Research in Motion. How people perceive this week goes will have a great deal to do with whether RIM survives as an independent company, or at all. You typically get one chance for a makeover at the scale that RIM is attempting. If you get it wrong, well, we saw what happened with Palm, which first lost its independence and then was put to death by its new parent, not an uncommon result.

This week will only be the first step, though. There will be three phases of this turnaround, all of which will have to execute brilliantly. This is difficult to do, as we saw with Palm, but not impossible, as we saw with Apple.

Let’s contrast the Palm and Apple turnaround efforts and use them for a template on what to look for on RIM.

Product vs. Perception

One of the big differences between Palm and Apple’s efforts was that Steve Jobs got to work on Apple’s image long before he was able to have the product problems corrected. Palm took the more common approach of waiting to have a product to showcase before working on image. The result was that Apple stabilized its losses before the iPod returned it to full growth and signaled recovery. Jobs had already gotten enough people to believe that Apple could execute again that when it finally had a hit product, and even though it took two versions for that product to actually reach hit status, the result was pretty much assured.


When the PalmPre hit, even though it was an amazing product for its time, folks didn’t believe in Palm and the product had to carry all of the weight. This was more like swimming upstream. If you believe a company can only screw up, you look for the negatives in an offering to confirm your preset belief. Enough people believed that Apple was on the right track that even though the first iPod only worked on Macs, they still praised it, while with Palm even though the Pre was arguably one of the best smartphones of its era, folks tended to focus on its shortcomings rather than its advantages.

The lesson here is that perception rules. Unless enough people believe you can be successful, doubters will find ways to prove they were right by creatively confirming their existing perceptions, making their set predictions of your failure a forgone conclusion.

Currently, RIM is trading up in the market, suggesting that there may be a ground swell of people who believe RIM can succeed.  This likely points to the fact that the company has been aggressive in briefing stakeholders and that word of the new product and platform has been strong enough to change perceptions about the company.

Marketing

Steve Jobs took on marketing as a personal passion, and from the launch of a product to how it was advertised, he generally took pride in having significant input into the process. This marketing helps keep the relatively high cost of Apple’s products from being a significant problem (until lately) and Apple typically is not only a showcase of high advertising spending but excellent execution.

Palm, on the other hand, took a multi-million-dollar ad budget and wasted it on high-concept, difficult-to-understand ads. Had the company burned the money, it likely would have been better spent. The ads appeared to confuse buyers on just what Palm’s new phone could actually do. This was so bad that I’ve often thought that Jobs must have had the lead people doing advertising at Palm on his payroll. Palm’s effort both hurt Palm’s brand and eliminated its war chest: brilliant if it was intended as sabotage, but incredibly foolish if the actual intent was to drive Palm’s recovery.

We haven’t yet seen RIM’s full ad creative, but it has reorganized marketing, putting talented people at the top and giving them freedom to act. The parts are there to do something impressive, but without seeing the creative I can’t yet say if the parts add up to a compelling whole.

Advocacy

Apple started with what still has to be one of the strongest consumer loyalty scores in technology. It had a fan base and Apple was able to turn these fans into advocates for its products. These were the folks who first started to line up to buy Apple offerings overnight and who helped make the product appear desirable because they were unique and often hard to get. In product launches, Apple seeded audiences with advocates, often employees, who would cheer at critical times and help drive the excitement. And in stores, they have the genius bar, which is populated by experts, showcasing that they not only got the importance of their fan base, but they improved it over time, contributing greatly not only to the turnaround but Apple’s long-term success.

Palm burned most of its advocates out in the mid-90s and didn’t bridge to them with its new line and devices. It had a series of CEOs who didn’t appear to understand marketing or advocacy, and when the PalmPre launched, it was as if it was launching a new company from scratch. However, at the launch, it too seemed to have a seeded audience, suggesting that someone in management understood a critical part of the process. But after the launch, there was no real evidence of any effort to build or improve advocacy. As a result, when the effort started to fail, Palm had no real defenders. The phone was simply different, and not seen as magical or special that first critical year, even though at the launch it had both attributes.

While RIM has a reduced fan base, it remains very well regarded with professionals, particularly in markets like pharmaceuticals and government, where security has a greater importance. If it can hold and increase these advocates, while it isn’t in Apple’s league, it starts off far better than Palm.

Wrapping Up: Product

You’ll notice that I didn’t spend a lot of time on product. That is because there is little doubt that RIM can build a good phone. One of the running industry jokes is that the iPhone is good at pretty much everything but being a phone, and it showcases that even an adequate device can do very well if people believe in it. But while the Palm Pre was industry-leading in many ways, Palm’s inability to be seen as anything but a loser, to advertise successfully, or even build advocacy killed it. The product just wasn’t as important. There is no doubt that RIM will have an adequate product. Heck, it could even be amazing, but if potential buyers just see it for its differences and shortcomings, RIM will lose. RIM is in better shape than Palm, which failed, but not in as good shape as Apple was during the iPod years, and the Blackberry has to be RIM’s iPod.

What is interesting about this new product is that this phone was unlike the others in that it was built for business. That may give RIM enough of an extra edge to make the difference.

I’ll be at the event on Wednesday and will report back on how it went.



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