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Smartphones 'Exploding' on Consumer Market

Jeremy Glaser

Jeremy Glaser: I'm here with Paul Cousineau of Palm at CES 2010. Paul, thanks for joining me.

Paul Cousineau: Thank you.

Glaser: So yesterday, or was it two days ago, Palm released the Palm Pre Plus and the Palm Pixi Plus and announced it'll be available on Verizon later this month after being on Sprint for a year. How have the first six months of webOS and Pre, how do you guys view the success of the product so far?

Cousineau: We've had some incredible successes. It started out in June when we launched with Sprint, and then we moved to a number of countries and a number of carriers. We're in Canada. We're in a number of countries in Europe with Telefonica. We're in the UK, Germany, Spain and Ireland.

Then yesterday what we did is we announced that we are going to have two new products, the Pre Plus and the Pixi Plus. We also announced that we have two new partners, Verizon, but also SFR in France. So we've shown some steady momentum, and we're making great progress.

Glaser: So how important do you think that the application or the number of applications available is when people are deciding to buy a product?

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Cousineau: Well, I think definitely people want choice. They want a wide range of applications, and we've done a number of innovative things to actually provide those choices to customers.

Yesterday we announced that we have some great 3-D games that are available on the platform now through our App Catalog, things from Electronic Arts, from Glu Mobile, Gameloft and others.

We also mentioned that we are going to have something called a plug-in development kit, which is going to allow people to develop a lot of these sophisticated games, launched in March. Incremental to that, we've opened up the actual data that we used to build our Application Catalog.

We basically have taken that database and made it public on the Web for anyone to develop directories, merchandising mechanisms so that we can actually use the Web to help drive discovery of these applications on mobile devices and on the desktop, and provided a very convenient way for you to find something on a Web site, click on it and then after a couple taps on your phone, you actually have it installed there.

Glaser: So how does developing for the webOS differ from maybe being a developer on another mobile platform?

Cousineau: Well, it's really fast. It's really an easy environment to develop in. HTML, JavaScript and CSS are widely understood technologies, and that's what's used for all the apps on the platform.

We also offer some pretty unique integration capabilities. A good example of that is if you're listening to Pandora, for example, on a Pre and you like that artist, you can actually tap and buy a song from that artist from the Amazon MP3 app.

The apps aren't siloed pieces of functionality. They can actually work together to provide a better experience for customers. That's some distinguishing factors of developing for our platform.

Glaser: So far it seems like the webOS devices are being sold over a traditional carrier-subsidized approach. With Google coming out with Nexus One and thinking about moving towards a direct-to-consumer, unlocked phone, is that something that Palm would consider, thinks is a superior model?

Cousineau: I wouldn't say I think it's a superior model. Today, really people have a significant attachment to a carrier that they want to actually have a relationship with. Verizon, for a lot of people, it drives a lot of loyalty. So we think that that's going to be the dominant model for the foreseeable future for people buying their smart phones.

There is more than just the coverage in your area, but also just there are some value-added services provided. The VZ Navigator service with turn-by-turn is what we have on the Pre Plus and the Pixi Plus, and those types of services are things that require network capabilities and require some level of integration. So we think that that's going to be a real strong model for us to follow for the foreseeable future.

Glaser: The target for smart phones for years was the enterprise customer and then the pro-sumer introducing the smart phones trickling down to people who are using dumb phones right now, or do you think it's going to stay at the prosumer level?

Cousineau: We absolutely see that. Right now there's an explosion of people basically moving from feature phones to smart phones, and that's really driving the product design. You see both Pre and Pixi are very consumer-centric devices, and they connect you to not just EAS, but they connect you to Facebook. They connect you to Yahoo. They connect you to Google.

So really there are significant amounts of consumer, and people, they really use these phones for their life, so they want to have all the capacities and connected to all the things that are important to them.

Pixi is a great example of the perfect first smart phone, taking advantage of that trend of people saying, "OK, I've got this pink RAZR. It's been kicking around for four years. I've got to get something new."

Pixi's a great, small, lightweight product, incredibly accessible, and then very customizable. That's why we have these back covers. You can actually see behind me there are some from the Artist Series, and we have some colored backs that we're doing now. So you really can get a sense for a fashion element to the product and really have something that people find expresses their own style.

Glaser: Wonderful. Paul, thanks for joining me today.

Cousineau: No problem.