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Palm About to Go Nova

By Tim Beyers - Updated Apr 5, 2017 at 6:58PM

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But will a new OS be enough to reignite growth?

Investors waiting for Palm (NASDAQ:PALM) to refresh its technology may not have to wait much longer.

On Monday, the company introduced its Palm "Software Store," a rival to Apple's (NASDAQ:AAPL) iTunes App Store, foreshadowing what could be a reveal of its new Nova smartphone operating system at January's Consumer Electronics Show in Las Vegas. Finally.

We've been waiting for a new Palm OS ever since Bono and his investing bandmates at Elevation Partners gave the company a financial lift last summer. That's when former iPod design leader Jon Rubinstein joined the company as executive chairman, promising a new era of innovation.

Palm has seen successes since. The affordable Centro handset has been a top-seller, for example. But I've yet to see evidence of Palm recapturing its innovation mojo. Take the Software Store. With 5,000 smartphone programs, it's a lightweight version of the iEmpire's 10,000-applications-strong App Store. Nor is it distinct from what Google (NASDAQ:GOOG) created with Android Market and what Research In Motion (NASDAQ:RIMM) plans for its BlackBerry devices. A competitive advantage this isn't.

Nova could change that. Maybe. Insider Mike Bell, also a former Apple engineer, waxed optimistic in a recent BusinessWeek interview. "I'm fundamentally convinced we're onto something huge. Some of the stuff we're working on here is mind-blowing -- better than anything I've seen before."

It'll take something mind-blowing to get investors outside of Elevation excited about Palm again. The company already pre-released dismal earnings for last quarter that featured revenues coming in at about half of original analyst expectations. Palm will release its complete financial results this afternoon.

Many of those following the company in our 120,000-strong Motley Fool CAPS community predict still lower lows:



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Investors have good reasons to be skeptical. History, for one. Churn, for another. CFO Andy Brown is leaving the company in January, just as Nova is to be released.

"IMHO makers of the world's best buggy whip or eight track tapes. Maybe not all that bad but they have an incredible gap to cover," wrote CAPS investor socialconscious earlier this week.

Harsh? Sure. But Palm has burned investors before. Can't say as I blame them for avoiding the flame this time.

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Apple is a Motley Fool Stock Advisor selection. Google is a Motley Fool Rule Breakers recommendation. Try either of these Foolish services free for 30 days. There's no obligation to subscribe.

Fool contributor Tim Beyers is a member of the Rule Breakers team and had stock and options positions in Apple and Google at the time of publication. Check out his portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy is feeling transparent today.

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Stocks Mentioned

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Alphabet Inc. Stock Quote
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