Is palmOne Blowing Its Big Chance?Is palmOne Blowing Its Big Chance?

When I was a Known Marketing Type earlier in my career, a rule of thumb was that you charge lower prices for new products when you need to buy market share. So why is palmOne, which needs market share desperately, charging so much for its innovative new LifeDrive PDA?

PalmOne is expected to release its new LifeDrive on May 18. It's a long-needed redefinition of the PDA and, in theory, it should be a boon for the still-struggling palmOne. And if ever a company was in need of such a boon, it's palmOne.

To be blunt, this company would have been gobbled up, bankrupt or largely irrelevant by now if it hadn't very wisely shifted its attention to smartphones a couple of years ago. Because of the Treo smartphone, it remains quite relevant, but the company is a long way from being out of the woods. While Treo is very popular in North America, the devices aren't exactly hot outside of North America and palmOne's line of PDAs is dying a slow death (as are all vendors' non-connected PDAs). In other words, palmOne is hanging in there and even showing a small profit, but its future remains a question mark.

The LifeDrive PDA should be hot. It will sport a built-in hard drive, a large, bright display, Wi-Fi, Bluetooth and tools for managing multimedia and other files. While cellular voice support would make it irresistible, LifeDrive still should have a strong impact on both the mobile device industry and on mobile users clamoring for ways to manage their media and other data files and stay connected while they're out.

But at $500, who's going to LifeDrive? Six gadget geeks in Silicon Valley, a couple in Seattle, one or two in L.A. and a few scattered folks in other locations, that's who. At $300 or even $350, LifeDrive is a best-seller. At $500, it's a curiosity. True, it will get palmOne some visibility, but it won't make the company much money until the price comes down signfiicantly.

This isn't a rant about the device. In fact, I can't wait to get my hands on one and we're hoping to post a review of the LifeDrive on, or close to, its release date. And I understand that the cost of goods on a device like LifeDrive will be far higher than the cost of building, say, low-end Zire PDAs.

Plus, palmOne has other chances to grow. Releasing the long-rumored Windows Mobile Treo would get it into the enterprise and give it a chance to compete in Europe. And a cellular version of LifeDrive for $500 could be huge.

But I don't for the life of me understand out why a struggling company like palmOne, which relies on a single product, the Treo, to keep it afloat, is releasing a potentially exciting product like LifeDrive and keeping it out of reach of the masses.