The new Palm Pilot

Back in the mid 1990s, I received my first Palm Pilot. My father worked in the IT business and was always current with the newest model of the Palm Pilot, so I was always lucky enough to get his hand-me-down devices. For those of you who are unfamiliar with the technology, it was a little hand-held computer device that you could use as an agenda, calender or basic minicomputer. It was fully capable of many functions. I had one before I ever bought a cell phone so it was my main way of keeping people's phone numbers.

With all the advances in the cell phone industry the Palm pilot seemed to quickly fizzle out. It just became old technology that the most common cellular phone could easily trump. Well now in the year 2009, the Palm company is scheduled to release a new hand-held device, the Pre.

The Pre will be a device that will be fairly similar to the iphone in function. Currently the Palm organization is having two major problems associated with the release of their product. The first will be their struggle to provide enough phones to match the initial demand of the product, the second will be how to budget the initial marketing program for the release of their product. Palm must figure out if they will be able to finance the capital needed to be able to produce their product and if they can do it before going to deep in the hole.

According to an article in the Dow Jones news wire, "Carriers often won't pay a handset maker back until the phone is sold to a customer, meaning there could be a lag between when Palm pays to make the phone, and when it gets paid for it." This alone could be detrimental to the capital that Palm has on hand. In my opinion, Palm needs a way to hedge against this risk as much as possible. If there is any kind of initial recall on the product after the release, this could single handedly destroy the palm company. The Palm company is banking on the release of their Pre to be a success and save the organization from going under. However " Analysts peg the 1 million unit sale mark as the break-even point" for the product. So if the pre doesn't live up to its expectations, without proper risk management techniques the Palm company could easily go bankrupt.

http://money.cnn.com/news/newsfeeds/articles/djf500/200903091451DOWJONESDJONLINE000495_FORTUNE5.htm