Comments on: Texas Instruments May Buy a Chunk of PalmSource

According to several online sources in Germany, the Berlin newspaper Berliner Zeitung recently ran an article that said Texas Instruments is in negotiations with Palm Inc. to take an equity stake in PalmSource when it spins off from Palm. If such an agreement comes to pass, it is not yet known what effect it would have on the Palm platform.
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More Shareholder Dilution

I.M. Anonymous @ 3/25/2002 10:12:01 AM #
The pie is only so big. You can only squeeze so much from a lemon. Who pays for this? The current shareholders.

RE: More Shareholder Dilution
crustyedgeofinnovation @ 3/25/2002 10:18:14 AM #
I'm certain by your ignorance that you must not actually be a shareholder, but you posted Anonymously, so we may never know for sure, anyway, there is no dilution, it would be a spinoff or an investment, you don't even know what dilution is...

RE: More Shareholder Dilution
I.M. Anonymous @ 3/25/2002 10:20:46 AM #
I'm ignorant because I'm "NOT" a shareholder? Oh I guess you are one of the "smart" ones who own it at $120. When they spinoff PalmSource from Palm, the value of Palm will plummet and although current Palm shareholders will get some PalmSource shares, their ownership will be futher diluted. No - I don't/never did own any Palm - I own the monopolistic, 800 pound gorilla - MSFT. MSFT is a company who works for its shareholders and doesn't screw them through dilution. So go back to your desk and push some more papers and don't chime in on things you know nothing about.

RE: More Shareholder Dilution
I.M. Anonymous @ 3/25/2002 10:29:41 AM #
Oh - and I love it when people chide others for posting anonymously, when they themselves use anonymous silly names.

RE: More Shareholder Dilution
peter167 @ 3/25/2002 10:51:56 AM #
MSFT does not screw its shareholders, but screw those who bought(/use) their products.

It seems Palm is giving free shares to TI so that it is perceived as dilution, if this is indeed true.

Lie is the future.

RE: More Shareholder Dilution
I.M. Anonymous @ 3/25/2002 10:56:50 AM #
> It seems Palm is giving free shares to TI so that it is perceived as dilution, if this is indeed true.

No, no, no, no. Did I say "no"? TI is going to buy, as in give money for, the PalmSource shares it gets. It is getting nothing for free.

RE: More Shareholder Dilution
I.M. Anonymous @ 3/25/2002 11:23:27 AM #
Let me give you an analogy. Let's say me and my three friends all own a tractor and trailer. I own 60% and the others own 10% each. But we need gas money because through mismanagement, I spent all of our pooled gas money at the bar on booze and girls and got drunk. So after the hangover subsides, I decide that I have no choice and must unilaterally sell some of the ownership of the Tractor piece to someone else so that we can buy some gas to run the Tractor. Now we have FIVE Partners on the same assets. Sound fair?

RE: More Shareholder Dilution
I.M. Anonymous @ 3/25/2002 11:39:45 AM #
sorry - 10% should be 13.3%. You get the idea.

RE: More Shareholder Dilution
peter167 @ 3/25/2002 12:17:23 PM #
I think your analogy is good. But has the situation changed since the 'mismanagement' (the time you find more partners)? The answer is no. The financial situation has not changed due to the transaction that you are finding more partners to co-own the tractor, given the assumption that the new partner(s) will not pay less than the market value of the stake he/she owns.

Or you could say the company (who owns tractor) was diluted but not being diluted right now.

Lie is the future.

RE: More Shareholder Dilution
I.M. Anonymous @ 3/25/2002 12:30:11 PM #
Your analysis is fundamentally flawed. Dilution happens when you assume equity value stays the same and more parties enter to share the equity. However, what the company and shareholder hopes is that new investment would spur growth, and the market value would increase as a result. If so, your portion of the equity will increase despite more parties being involved.

Let's see if I can make a first grader understand. If you have $100 and 5 people, you all get $20. However, if you increase to 10, then everyone gets $10 (dilution). However, if $100 grows to $500, then everyone gets $50. So, where is the dilution in this case?

RE: More Shareholder Dilution
I.M. Anonymous @ 3/25/2002 1:12:10 PM #
Automatically assuming that the market value of the company will INCREASE after the investment is what is fundamentally flawed. In theory the stock may rise, it might stay the same, and it may even fall. BUT one thing I do know is that our boys at Palm burn through money like drunken sailors with little or nothing to show for it.

RE: More Shareholder Dilution
I.M. Anonymous @ 3/25/2002 1:45:47 PM #
I am not sure if the Palm Source is a good value after TI owns a good chunk of it. TI would definitely insist on OMAP technology. This in itself is not bad right now since OMAP has superior wireless and DSP, but I don't see anywhere in TI a roadmap. what is their plan for OMAP successor? This contrast to Xscale that already has roadmap (130nm for next iteration)

what happen after 2004-5? This is critical year when PPC is predicted to surpass Palm units sold. Will Palm once again forced to search for something to replace the OMAP DSP just so it can offer something attractive?

RE: More Shareholder Dilution
I.M. Anonymous @ 3/25/2002 4:13:40 PM #
*what happen after 2004-5?*

I think Palm will still lead in units sold but PPC will lead in revenues due to higher-priced, high-margin machines.

RE: More Shareholder Dilution
I.M. Anonymous @ 3/25/2002 5:06:05 PM #
not what the trend says if PPC keeps taking the share at about 10%/year clip.

Unless Palm has some magical manufacturing trick, it is very unlikely that Palm can produce PDA with similar features as ppc (ie. screen size, memory amount, battery size, audio, etc etc) at significantly lower cost. What's more taiwanese manufacturers start picking up PPC and climbing the learning curve, which is to say that if iPAQ trend hold, strong-ARM class PPC would go for about 3-400 around 2005. As usual big industry name like HP/Toshiba/COmpaq have purchasing power over component. So that's on price parity.

the argument that current Palm models can keep selling until 2005 to hold market share is difficult to swallow since even now those models sale already plateau-ing compare to early day of Vx. Unless Palm is thinking to go ultra low margin disposable sub $50 handheld by 2005, holding everything constant, sale will decline.

Three yrs are a long time in handheld. Two yrs ago PPC have exactly 0% market share and palm 95+%. Whose to say that current form of PDA will not even be here anymore (just like Psion/MS clamshell) and everything will be funky wireless PDA with jazzy Nokia look.

RE: More Shareholder Dilution
I.M. Anonymous @ 3/25/2002 5:33:42 PM #
> not what the trend says if PPC keeps taking the share at about 10%/year clip.

Where did you get that rate from? The first WinCE devices were released 5 years ago. Microsoft may have changed the name to escape all the bad press but PPC is just WinCE repackaged. So in 5 years PPC has about 20%. That's a 4% a year trend.

RE: More Shareholder Dilution
I.M. Anonymous @ 3/25/2002 5:49:04 PM #
since PPC, true, before that WinCE hoovers flat below 5%. The curve is not a linear first order line, so if somebody is crazy enough to forcast PPC market share to be 28% in 2004 instead of 30-40% that would be only palm zealots, but not what most PDA manufacturing says.

Others speculate...

crustyedgeofinnovation @ 3/25/2002 10:13:33 AM #
You said in the article

"Texas Instruments is in negotiations with Palm Inc. to take an equity stake in PalmSource when it spins off from Palm."

Many people, believe that if TI will invest in PalmSsource, this could be a sign that Palm will not be spinning off the unit. I think it would be better to spin off PalmSource and maybe build some cash reserves at Palm, but if TI invests, Palm might not do the spinoff... This is all speculative of course, and the fact that companies are showing an interest in Palm is always a good sign...

RE: Others speculate...
I.M. Anonymous @ 3/25/2002 10:51:23 AM #
I believe an analyst from Bear Stearns is the originator of the idea that Palm might decide to not spin PalmSource off because TI is interested in investing in it. I have to doubt this is true simply because Palm has to realize that it would really hurt their share price. Most people agree that the best thing for the platform is to have PalmSource be an independent company.

Speculative, at best!

montyburns @ 3/25/2002 11:03:16 AM #
I will wait until something definite happens with this story. I have heard rumors before - Apple was going to buy Palm. Then it was Sony. Then it was IBM, Dell. Palm and Handspring were going to merge, too.

So, whether or not this story is true, time will tell.

I like my Palm!

I.M. Anonymous @ 3/25/2002 12:56:24 PM #
Isn't this deal almost a done deal? Or was it some other company that loaned them the bucks last December.

Mystery Investor Loans Palm $50 Million

RE: Speculative, at best!
I.M. Anonymous @ 3/25/2002 1:57:53 PM #
The rumor is pretty strong that TI gave Palm the $50million in exchange for Palm using OMAP. Who else?

Not neccesarily bad

sandbuck @ 3/25/2002 2:05:38 PM #
A comapny like TI could be a good partner for Palm Source. It all depends on how much of a stake they're buying. PalmSource needs to be able to freely walk away from this relationship if it turns sour.

RE: Not neccesarily bad
I.M. Anonymous @ 3/25/2002 2:31:44 PM #
You are kidding right? If TI pour several hundred millions dolar and thousands of man hrs, they sure want something in black and white regarding future IP ownership and market agreement.

TI should buy the Palm Harware div. & Apple buy the OS!

I.M. Anonymous @ 3/25/2002 2:23:35 PM #
TI should buy the Palm hardware division and the Palm OS division should be sold off to Apple.

Apple would be the best company to develope the Palm OS and TI would make and develope "Palm" brand PDA's and Phone using thier new Chip(s).

RE: TI should buy the Palm Harware div. & Apple buy the OS!
I.M. Anonymous @ 3/25/2002 2:29:59 PM #
No Apple would NOT be the best company to do this since Apple is ONLY interested in making software that runs well (or in most cased: runs ONLY) on Apple.

RE: TI should buy the Palm Harware div. & Apple buy the OS!
I.M. Anonymous @ 3/25/2002 2:34:08 PM #
TI's only succesfull handheld so far is their TI calculator line, while at Apple, Steve job hates the idea of PDA.

so, it's bad scheme all in all. It would be very depressing for the entire BeOS team to join Apple that way.

RE: TI should buy the Palm Harware div. & Apple buy the OS!
I.M. Anonymous @ 3/25/2002 4:01:42 PM #
This is a silly comment (since Apple has no interest in the Palm OS and still has the (much better) Newton OS on a shelf), but the responses are even sillier. Steve Jobs very much likes PDA's and has been known to use them himself. At last weeks MacWorld convention, he had a Sony Clie in his hand during his keynote! Just because Wes at PDA Buzz says Jobs doesn't like PDA's doesn't make it true. As for the comment about Apple is interested only in writing software that runs on its own machines, what about QuickTime? If ever there was an industry-standard package, that would be it.

RE: TI should buy the Palm Harware div. & Apple buy the OS!
I.M. Anonymous @ 3/25/2002 4:09:48 PM #
Steve Jobs doesnt hate Pda's he just didnt like Apple's own Newton. Now that PDa's can do alot more then they could 5 years ago with their color screens, faster processors, wireless connectivity, mp3 and movie playback I would not be surprised to see Steve Jobs have a new enthusiastic attitude towards a new Apple PDA.

I dont think Apple should develope thier own OS for a PDA since Palm has so many apps and support but for Apple to take over the Palm OS and give it the time and money it needs (Apple is sitting on Billions in the bank)to maintain its market against Palms rivals M$ and Symbian.

Palms hardware is getting out-classed by Sony and Palm needs to do something fast.

RE: TI should buy the Palm Harware div. & Apple buy the OS!
I.M. Anonymous @ 3/25/2002 4:11:04 PM #
"Computer should have keyboard" -- Steve jobs, when ask to revive Newton upon his return to Apple.

RE: TI should buy the Palm Harware div. & Apple buy the OS!
I.M. Anonymous @ 3/25/2002 4:23:33 PM #
Sony's new Clie NR series "does" have a keyboard. Maybe a Apple version might be coming sooner then we think.

Maybe this is the reason why Sony wont make Clies with Mac OS compatibility out of the box if Apple will have their own version of the Clie NR for Macs exclusively.

Which would fetch more in a spinoff? PalmOS or PPC?

I.M. Anonymous @ 3/25/2002 3:56:15 PM #
PalmOS has 80%+ market share but is PPC worth more?

RE: Which would fetch more in a spinoff? PalmOS or PPC?
I.M. Anonymous @ 3/25/2002 4:07:05 PM #
depends what's in the company? (the engineers, managements, IP's, future contracts, maybe even the financial health)

Chop Another Palm Off

I.M. Anonymous @ 3/25/2002 8:24:26 PM #
I can't help but notice this with Palm. It is indeed one great story about how a company that successfully created a category in personal computing always seems to be lobbed around like a ball that nobody truly loved except for the original founders/team and its loyal customers.

If anything, and a big if, TI buys PalmSource I suggest their executives read Andrew Butter's book first. It is amazing that the PalmOS has survived so far so long, let alone the competition from Microsoft.

And now, if it gets sucked into another corporation, I seriously wonder if that little OS will yet survive another round of racquetball. Perhaps, with Palm, Inc it may languish. I am not surprised since the current CEO is equally incompetent about Palm and its unique position as the previous CEO did. All Eric cares is the bottomline. Palm needs someone like Jobs - who cares about the bottomline equally as much as the product.

The product/platform has survived all Microsoft, Phillips, Compaq, HP, Casio (and more) combined onslaught in the PDA market and still came out tops. Through the bungling of one owner after another, and despite all, it is still pretty much here. It all boils down to the great foundation the original team placed that have allowed Palm to continue sailing the rough seas. But another perfect storm?

My guess is at TI, another of those headless monster of a company, all they care about is how many more chips they can sell and will mould PalmSource into their nice little box to fit in.

And that my dear readers, does not bode well for us.

Let's Chip In And Buy PalmSource Ourselves

I.M. Anonymous @ 3/25/2002 8:49:52 PM #
I don't know if this works in America but can we rally Palm's pa and ma - Jeff and Donna to start an "open-source" collective for PalmSource and buy it off instead?

The thousands of programmers and users all subscribe to "shares" in this open-source collective and the OS is entrusted with a brain-trust board that oversees its development, marketing and sales. It is almost like creating a Linux/Java kind of business model.

Despite all that has happened to Palm, it has survived the competition and without a Steve Jobs! Think about it. Java has been evangelized with big bucks, Windows with FUD and MacOS by the sheer charisma of Jobs. But Palm? Palm, since losing it's de facto frontman - Jeff Hawkins - has continued to grow without the big bucks, without FUD and certainly without a persona (Yankowski - not!)

It has continued to the chagrin of the PPC camp because of 2 things: the beauty of the OS and its loyal (although often battered) users. If it gets sold to TI - trust me, another soulless CEO or worst still, getting it absorbed into one of TI's grand scheme of things and you can bet the very thing that has kept PalmOS going for so strong so long will die.

If I were at Handspring - I ought to think about where this is heading. Yes, perhaps Handspring has the power to develop a new "PalmOS" and is planning that - just in case.

If I were at TI - the PalmOS truly has a unique situation. It survived organically despite its owners stumbling over the years with Microsoft chomping at its heel. And that organism is its loyal users which may not survive another corporatization of its OS.

RE: Let's Chip In And Buy PalmSource Ourselves
I.M. Anonymous @ 3/26/2002 12:26:49 AM #
Sorry no can't do.

Palm Inc License the current operating system kernel from Kadak corp. Palm doesn't own the kernel.

while the new OS. How many time has Linux community ask/wonder if BeOS could be made open source. (Now what is the chance those BeOS engineer after all that actually want to make their work "Open source" community owned. Yeah right, they got to be the last people in geekdome who still crave to become ultra rich from their brilliant work. why do you think they join scrappy Palm Inc.? Of course to show that their work is so brilliant as to turn around the hopelessly primitive Palm OS with the next generation, and redeem their BeOS dream.

About all the open source business, PDA scene has already got an OS. It's call LINUX. (hey you can even dual boot Linux/WinCE in iPAQ now. On top of the daring Zaurus market experiment. I seriously doubt any geek in the planet is salivating over current OS4.1 technology.)

So there. back to square one.



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