Look, there are lots of reasons to be optimistic about PALM's future, but let's be just a little realistic about it.
Laying the groundwork for a wireless ISP
First, that's not the business they're in. Second, you'd better hope they're not in that business because there isn't a single major ISP on this continent making an actual profit.
content business
What content business? How many internet content companies have ramped up and disappeared in the past year? Who's making any money on this? And if you say Yahoo, you'd better be prepared to discuss something other than "pro forma" earnings. :-)
monthly content and access fees
Again, I ask, who is making money actually doing this? Don't confuse access fees with money that ends up in PALM's pocket: wireless data access is something PALM has to buy from the likes of Sprint, and it is in Sprint's pocket, not PALM's, that those access fees will go. This is a repeat of the landline ISP game...
millions of $$$ for PALM in royalties.
I have no doubt. Unfortunately this stock sports a triple-digit PE: millions of $$$ just isn't going to cut it. They need A LOT more than that.
if 13 million or so current PALM users each shell out $25 for the upgrade!!!
That would be a neat trick considering some of the hottest selling PALMs aren't even upgradeable. It seems a reasonable bet that the mass-market bottom-of-the-line Palm's of the future will also achieve relative price cheapness by being non-upgradable.
Again, there are lots of good reasons to own this stock, but until someone can actually prove there is money in the ISP or internet content game - and people have been trying for years - to count on them for zillions of dollars in revenue is not, IMO, prudent. |
