Palm Attempted to Buy PalmSource

Palm Inc. was still riding high on the wave that carried them to greatness in '96-'99. Remember, they really rose to prominence under US Robotics becuase Hawkins & crew had free reign and there was nothing even CLOSE on the market at that time. Things started getting ugly under 3Com and then got much worse after they were spun off into Palm Inc. After Handspring's crew jumped ship and started up a successful licensee company, Palm's beancounters thought they could take over the market from an OS standpoint by lining up a row of top-flight licensees spearheaded by Sony. As many have commented on this site, it was likely just a carefull plotted plan all along to line the pockets of certain individuals at the expense of the company/companies' long-term health, market share, and the investors' $. It also bought PalmSource enough time to keep tinkering what their various OS efforts until a buyout could occur.

That basically put 'em in the pickle they are in now. Combined, of course, with Yankowski, Nagel et al, several years of continued sales/shipment dropoffs by Palm/PalmOne, p!$$ poor quality control, the spectacular flameout of Cobalt, the distractions of changing company names/logos/HQs, the China Mobilesoft acquisition, and the bailout of Sony and all of the notable licensees producing SHIPPING POS product. Only Palm's acquisition of Handspring & the Treo 600 saved them. The importance of cheap retail-friendly products like the Zires & T|E cannot be underestimated either, as far as keeping Palm's string of profitable quarters intact.

So by launching a M$-powered Treo, Palm's again forsaking their future in exchange for having some (theoretically) spectacular sales over the next couple of quarters. I figure the Treo name/UI/formfactor/public goodwill has enough momentum left to give good (even great initial) sales to another POS-based variant and one or two WinMob-based products before the market passes Palm by one final time.

In hingsight, the split shoulda never occured, Sony would have been better served by a less aggressive release schedule and more consistent product design, and Handspring should have established by Palm as a loosely-affialted subsidiary intended to explore new markets (think Aiwa and Sony). It's hard to say much about Cobalt because OS5 was intended as a stopgap OS designed to last a year or so and no one ever figured Cobalt to never materialize on a shipping product.

That way, they would only have one set of hardware to manufacture, and wouldn't have to worry about becoming overstocked on one Treo or the other, because they could always just reflash them to the other OS.

Palm would be wise to consider a two-pronged attack:
A. Have all traditional PDAs running POS & retailing @ $300 or less while killing the LifeDrive after the 2nd generation version comes out
B. Put most of their eggs into the Treo basket while spending some serious $ on R&D and quality control.

Imagine a 320*480 Treo with a physical screen size smaller than the T5's but with a flip design w/ hard number buttons integrated into the flip cover ala Qualcomm PDQ. THAT would be a killer device in so many ways..and FrankenGarnet could even conceivably handle it! Offer it with a choice of OSes at the same price points and they'd have a winner as Adama stated above.

I personally won't upgrade to a Treo until they offer it with 320*480--the extra pixels & screen real estate are just too critical to getting real work done.

I also agree on the Palm OS licensing charges getting expensive if Access gets a foothold into the smartphone market. Palm would be wise to go ahead and make a secondary offer to secure Garnet and Cobalt lock, stock, and barrel for their own purposes. Then they could conceivably cobble all of that into their own version of the OS for low-end devices and in case the Access licensing situation gets ugly. To use jarjar's analogy again, it'd be akin to the guy in debt selling his expensive house but buying a little mobile home to keep around just in case...

Are we sure the "670" is 240x240? I know that's been said, but? I was under the "weak" impression that WM did not handle 320x320? Or was that the 2003 or whatever they name the stuff?

It makes no sense to cripple it like HP did IMO. HP will pay dearly for that rez in my estimation. WM5 at 320x320 could be the ticket for Palm. Make the devices identical in the hardware department and flash the OS. Or make it simple to drop in faster / slower chips and more/less flash and swap OSes. Could such a thing work to succeed?

Pat Horne; www.churchoflivingfaith.com

I may be paranoind but I have to wonder if it's all being orchastrated under the table by someone to ensure that Palm os quietly dies off without the possibility of becoming another Linux distro with GPL licensing?

This from the person who's so paranoid, he insists that any and all negative things ever said about Palm or PalmSource, by anyone, is the work of paid Micrsoft astroturfers.

Let's see Palm offered $2,000, Moto offered $4,250 and Nokia $11,500! Looks like Access took a bath @ $330M!
:-)

Pat Horne; www.churchoflivingfaith.com

Be Careful Out There!

I love Jeff and his podcasts. I find him to be a bright guy with a "wide spectrum" of ideas... ;)

By way of background, class actions are a common way by which so-called 'ambulance chasing' plaintiff's lawyers* seek to extract easy money by trying to embarrass a defendant into a quick settlement. The usual tactic in response (by many in Corporate America) is to intentionally make the process more costly and to draw it out, so as to disuade the plaintiffs - by avoiding an easy settlement, it is often cheaper to do this that accept a quick settlement.

(This is not a criticism - some of my golf buddies are plaintiff litigators - this is just how they are often described in the press.)

By the way, do you have any inside dirt on what the latest M$ reorganisation will mean for the WinMob division? Looks like they are being shuffled into the same division with Xbox and other loss-makers - segregating the basket cases like this is a classic management ploy - as a lead-up to more drastic action latter on.

Of course this is being done in response to Wall Street views on the current malais at M$. See for example the recent article in Forbes magazine, where it was said:

'What has gone wrong? Microsoft, with $40 billion in sales and 60,000 employees, has grown musclebound and bureaucratic. Some current and former employees describe a stultifying world of 14-hour strategy sessions, endless business reviews and a preoccupation with PowerPoint slides; of laborious job evaluations, hundreds of e-mails a day and infighting among divisions so fierce that it hobbles design and delays product releases. In short, they describe precisely the behavior that humbled another tech giant: IBM (nyse: IBM - news - people ) in the late 1980s. Tellingly, IBM reached a point of crisis just over three decades after it started selling computers to commercial users.'

In this sort of cut-throat environment, how long to do you expect the WinMob heroes (who have NEVER made a profit) to survive?

BTW, msmobiles.com says that WinMob was not previously in the same division as the Xbox crew -

http://msmobiles.com/news.php/4303.html

Since you are always right, Surur, I suppose this means that the msmobiles.com writer got it wrong.

Note also that the head of the former WinMob division is being demoted - he is now the deputy head of the combined division.

Absolutely right.

AT&T was broken up under the Sherman Anti-Trust Act as a penalty for monopolistic practices. (The case is required reading at any reputable Law School.)

The mighty M$ narrowly escaped this same fate a few years ago (through a Houdini-like settlement). The talk among Anti-Trust lawyers is that it's doubtful anybody will go through the pain of suing them again in the foreseeable future.

However, if the latest M$ restructure doesn't satisfy Wall Street, the analysts will likely press for a self-imposed break-up or, at least, a shedding of marginal businesses.