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Palm to board member McNamee: What you talkin' 'bout, Roger?

March 10, 2009 |  2:29 pm
Palm Pre
Can the Palm Pre live up to Roger McNamee's claims? Credit: renaissancechambara via Flickr.

Last week, Elevation Partners co-founder and Palm board member Roger McNamee made sweeping claims to Bloomberg about how the upcoming Palm Pre smartphone would soon overtake the iPhone. Now, Palm has essentially told him to cram it.

The company filed a Free Writing Prospectus on Monday in which it issued a 10-point "clarification" to McNamee's statements. It was reminiscent of the same way an embarrassed teenager might tell his friends that he's not quite as cool as his grandmother brags he is.

What did McNamee, who has worked with Mark Zuckerberg, U2's Bono and Bill Gates, actually say? There was this one: "Our product's just going to run rings around them on the Web. If you want to go to the Web, it’s just going to be a million times -- well, not a million times -- several times faster." And this one: "There are aspects of the Pre that are unlike any phone you’ve ever seen before." And then this one: "Sprint, which is our partner, has by far the most mature 3G network."

For those of you salivating at this new superphone, Palm wants you to know that it can't stand behind McNamee's claims. For example, in its prospectus, Palm says:

With respect to the statements in the tenth paragraph of the transcript that the Palm Pre is “going to be a million times –- well, not a million times -– several times faster” than Apple, Inc.’s iPhone products and is “going to run rings around them on the web,” the Palm Pre is still under development and it is premature to state the speed at which the device accesses the Web or the relative speed of the Palm Pre compared to the smartphone products of competitors.

Same with McNamee's statements about Palm being based on newer technology than other phones. Palm says that "estimating one specific age for the many technology components underlying any mobile phone is inherently imprecise and these statements are withdrawn."

Perhaps the most egregious case of McNamee being a Don Quixote tilting at Apple's windmill: He  told the Bloomberg interviewers that "not one" person who bought an Apple iPhone when it was first shipped would still be using an iPhone two years later. Palm says that statement "is an exaggerated prediction of consumer behavior pattern and is withdrawn."

View all 10 points in the "clarification" after the jump.

-- Alana Semuels 

An excerpt from Palm's prospectus:

For purposes of clarification, it should be noted that:

1. Although market share estimates such as those in the fourth paragraph of the transcript that “Blackberry’s global market share is about 1.2%, and Apple’s is about 0.9 of 1%” are, by their nature, approximations, one third party industry analyst report indicates that in 2007 and 2008, Blackberry’s share of worldwide mobile phone shipments was 1.1% and 1.9%, respectively, and Apple’s was 0.3% and 1.2%, respectively.

2. With respect to the statement in the fourth paragraph of the transcript that “in the U.S., smartphones went from 10% to 20% just in the last year,” one third party industry analyst report indicates that smart phones made up 11.1% of U.S. mobile phone shipments in 2007 and 19.5% in 2008.

3. With respect to the statement in the fourth paragraph of the transcript that smartphones are anticipated to increase their share of the U.S. mobile phone market to “50% within 5 years,” one third party industry analyst report estimates smartphone share of the U.S. mobile phone market will reach 42.0% in 2012.

4. With respect to the statement in the fourth paragraph of the transcript that “this is a huge market: 1.2 billion units sold per year,” one third party industry analyst report estimates worldwide mobile phone shipments exceeded 1.2 billion in 2008.

5. With respect to the statements in the tenth paragraph of the transcript that the Palm Pre is “going to be a million times -- well, not a million times -- several times faster” than Apple, Inc.’s iPhone products and is “going to run rings around them on the web,” the Palm Pre is still under development and it is premature to state the speed at which the device accesses the web or the relative speed of the Palm Pre compared to the smartphone products of competitors.

6.    With respect to the statements in the twelfth paragraph of the transcript that “there are aspects of the Pre that are unlike any phone you’ve every seen before,” “the Pre is the first one that is the next generation” and “the result is it does a lot of things the others guys don’t do,” the Palm Pre is designed to be the first phone based on the Palm webOS™ platform and as a result will have different operating characteristics and features than other phones, however; the Palm Pre is still under development and it is premature to compare its full functionality with that of other phones.

7. The statements in the fourteenth paragraph of the transcript regarding the relative development and stability of Sprint’s, Verizon’s and AT&T’s 3G networks are generalizations regarding wireless cellular network performance that may or may not be true depending on a variety of factors specific to geographic regions.

8. The statement in the second paragraph of the article that “not one” person who bought an Apple, Inc. iPhone on the first shipment date “will still be using an iPhone a month” after the two-year anniversary of that day is an exaggerated prediction of consumer behavior pattern and is withdrawn.

9. With respect to the statements in the second to last paragraph of the article that “the underlying technology for Research In Motion Ltd.’s BlackBerry is about 13 years old, while the technology behind the iPhone goes back almost nine years,” estimating one specific age for the many technology components underlying any mobile phone is inherently imprecise and these statements are withdrawn.

10. With respect to the implications in the second to last and last paragraphs of the article that Palm’s new operating system will give it an edge over competitors that “are going to run out of gas way before” Palm, estimations of the relative useful lifespan of smartphone operating systems are conjecture, unverifiable at this time, and age is not necessarily predictive of their relative long-term success.

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