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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.
Buying it back is necessary when the OS is necessary for existence. (Palm won't survive as a WinMobile maker) Palm claims that "it didn't make sense". I'll cynically suggest that Palm just couldn't scrap the money together. If they had pulled it off, it would have been a great magic trick because they would have spun off PalmSource at a high price and bought it back on the cheap.
The next step that will occur down the road is that Access is going to want to recoup their investment and they will start demanding higher and higher licensing fees for Palm to continue using the PalmOS. When this happens, Palm is going to be sorry. They'll be stuck because they can't afford to pay the fees. This is akin to somebody in debt who sells their house to become a renter.
I suspect Palm will try to push out one more POS-based Treo (maybe in January? Remember, the i705 launched after Christmas but before the traditional spring release cycle) with comparable specs (EVDO, maybe PTT, 1.3mp digicam, 64mb NVFS) before making the big WinMob Treo splash next spring.
You are absolutely correct. This is why Palm can never become a major WinMob maker.
DELL makes computers and they have the purchasing power to buy and manufacture components more cheaply. DELL will always be able to make the same winmob device more cheaply than the equivalent Palm device.
In the short-run Palm might do okay if they have enough loyal customers who will purchase a winmob from Palm instead of DELL. In the long-run, price will always win. Palm can never compete against a competitor that has access to cheaper components.
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 outB. 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?
That's the stupidest idea I've ever heard. (And I hear a lot of them from the m$ shills on this site...)
The Palm OS had to be spun off becuase licencees knew the the Palm hardware business was benefiting from being "in-house" with the OS business. Probably Sony demanded it.
That's it. Nothing to see here. Go home. :)------"People who like M$ products tend to be insecure crowd-following newbies lacking in experience and imagination."
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.
Upon the release of the NR70V and the subsequent release of the Clie gamepad (not a half-bad realization for what it was, actually) I said that the next logical step was a portable Playstation variant of some kind and that the Clie line probably couldn't coexist alongside it.
When the PS2 launched in '00 and played DVDs out of the box it likely hurt Sony's CE DVD player sales as well. However, a household can make use of two DVD players. Two media/game-playing/web surfing "personal entertainment" devices don't coexist too well under the average American roof. That, coupled, with no viable long-term OS suitable for Sony's purposes, was the nail in the Clie's coffin probably as far back as '02 or '03 or so.
Sony's royalty payments, while nice, couldn't have been THAT much of an influence on the spin-off. Besides, once Sony got their first two underwhelming Clies out of the way, they quickly leapfrogged Palm's OS4 units and never looked back. I wouldn't call Palm's lackluster handelds of that era--monochrome m100s, the dim m505, T|T and its poor quality, low volume audio , monophonic T|C headphone jack etc--much competition to Sony's finest. Since Sony bailed, Palm's efforts haven't amounted to much and they've slid back into their old incremental upgrade rut.
About the only thing Palm Inc. could have been said to was "benefit" from was by supporting the native audio API and Bluetooth with the T|T series.
Hmmm...I wonder who the other bidders were? Could it have been Motorola, Nokia, or even Sony?!!! It actually is pretty lucky for Palm that PalmSource didn't fall into the hands of another handset competitor. That would have put Palm into exactly the opposite position other lisencees were prior to the Palm+Palmsource split. Anyway, at least we know why Access had to pay such a premium for PalmSource...--------------------Gaurav
Major European and US makers.... Nokia and Motorola ?And the one winning is a Japanese company. Interesting ... maybe there's a third party behind all of this, a Japanese company who aleady uses Netfront technology and may be more interested in having the OS keepers close at hand. ;-) ;-) ;-)
--------------------------Waiting for a TT successor
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
Could also have been Sony Ericsson.
Moto are going for a Linux-based phone OS having broken with Symbian and Nokia's 770 Internet Tablet is Linux-based. Either could have been a good match with Palm OS-for-Linux. Interesting...
Be Careful Out There!
That's right, Deny Everything!
At least we know that many major companies consider Palm OS to be of great value. I also appreciate that Palm had the wisdom to try and buy PalmSource.
As a consumer, I can see the value of Palm OS by the way the PIM features keep me organized. That alone is enough to justify the purchase of a device. Access Inc and others can see that also despite fluctuating device sales.
I think Palm OS has a good future.
PalmSource is irrelevant to POS, Palm should be glad they lost the bidding.orAccess will do better with POS in any case, just give them 5-10 years.orNow that Palm is selling WM devices, they are perfectly set to make Vista mini-tablet. POS would just have held them back.
I'll look forward to hearing my ideas repeated in Jeff's next podcast.
I love Jeff and his podcasts. I find him to be a bright guy with a "wide spectrum" of ideas... ;)
At all pertinent times, Palm represented to the public, including Class members, that the Treo 600 and 650 were quick, dependable and reliable hand-held organizers and mobile telephones; that they were free from defects; and that they were of merchantable quality and workmanship. In fact, these phones suffered from extremely poor sound quality and buzzing,choppiness, speakerphone problems, poor and broken screens, phone crashes, software crashes and electrical surges. When Palm replaced phones in response to these problems they replicated the problems by providing consumers refurbished phones subject to identical issues.3. Palm also concealed material facts regarding the Treo 600 and 650, including that Treos fail at unacceptably high rates, are inherently defective and are not reliable storage devices ormobile phones, are not of merchantable quality, do not conform to the specifications with which Palm has claimed they comply, and are not capable of being properly or reliably repaired by Palm. In fact, in an effort to combat the inherently defective nature of the Treo 600 and 650, it has been necessary for some consumers to go to extreme measures such as self-repair of the phone. The necessity of such remedial measures, however, is not disclosed by Palm to purchasers of the Treo 600 and 650, and these remedial measures are not practicable for, effective for, or available to all Treo users who may wish to attempt to remedy the defective nature of the Treo 600 and 650 and mayvoid the userís warranty.4. Furthermore, Palm has been aware for a substantial period of time that the Treo 600 and 650 were failing at a very high rate. Nevertheless, Palm has not warned its customers of the problem or tried to prevent them from suffering system failures and data losses. Palm has refused, and continues to refuse, to warn consumers about the defects inherent in the Treo 600 and 650 or to effectively remedy the problems and defects inherent in the Treo 600 and 650. Unwilling to admit fault, Palm has sat silently while consumers purchased these defective products and continues to sit silently today as a high percentage of the Treo 600 and 650ís fail to perform despite Palmís knowledge of the malfunctions. To this day, Palm has not warned customers about the risks inherent in purchasing and relying upon a Treo as a mobile telephone and organizer.
Maybe they could not afford PalmSource due to having to keep money in reserve to settle this class action suite. I hope it goes to trial. Maybe we will then head what the REAL return rate of Treo's and LifeDrive's are.
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?
MS will not be dropping WM anytime over the next 10 years at least,since they will always need a low resource OS for resource constrained devices. If they do they will be ceding an important strategic area to their competitors, Symbian and Linux.
As you said, MS has entered middle age, and they are very actively looking for new growth areas to satisfy their share holders. This currently means gaming and cellphones. You may argue convincingly that unconnected PDA's will be abandoned, but its pure fantasy to think MS will stop providing an OS for smartphones.
BTW, WM has always been in the same devision as X-box.
BTW, msmobiles.com says that WinMob was not previously in the same division as the Xbox crew -
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.
So they have come full circle, but of course you are right. They were'rnt always with x-box. Just in the beginning. When you have been in the business as long as I have you get a bit fuzzy over the details.
1/2 point for svrontis. That makes -199.5, but who's counting.
Technically, AT&T didn't break themselves up, they were ordered to break up.
Your point is still very true, though it will never occur to Microsoft. To their minds, bigger=better. They'll never realize that numerous smaller, more nimble companies could do a lot better job in each of their markets than a single megalith. So, they'll continue to blindly shuffle around, pushing products like the airpad and tablet PC--which most people could tell them will end up as niche products--and shocking everybody when they stumble across something that works. Who cares. MS these days is like a senile Bond villian, who can't remember where they left their shoes, let alone how to operate the death ray. They're increasingly irrelevant, and being supplanted by companies that can do it better, like Google.
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.
X-box would not survive or even stand a chance without the profits from windows and office supporting it.
WM would not have been able to develop exchange push e-mail without the cooperation of the exchange team.
Windows Vista made a big thing about the document-centric extensions it is adding to windows file system to make searching for files easier.
I'm not saying a break up is impossible. When a company is run by analysts instead of engineers anything is possible. It will however end as badly as the PalmOne/PalmSource split.
Breakup is what MS's competitors want to happen. If they are smart they would avoid falling for that trap.
BTW, there has been many reorganizations in the past. They do them nearly yearly.
One example: if Vista is made to work on handheld devices, where does this leave WinMob? To put this another way - if the operating system division claims that turf, will the WinMob division (or whatever they call themselves now) have much of a future?
You have told us before that WinMob will focus on phones instead. But I hear that telephony will be built right into Vista. From a consumer's perspective, if given a choice to buy a handheld that runs Windows in all its glory, why would you settle for that buggy* WinMob instead?
* footnote: Here is a link to a less than flattering review of the x51v over at pocketpcthoughts.com, which refers to the latest (continuing?) bugs:
Re Vista - Vista will never run on a phone. Its true that its clear that WM is being hamstrung so as not to compete with Windows XP and Office (hence the poor development of the built-in apps) but while it remains an open platform 3rd party developers are free do their job and satisfy the people with desktop-on-their-handheld ambitions.
Regarding internal competition. Im sure it exists, but many of the people at MS do not see the advantages of being one company brings e.g. X-box runs on an NT kernel. I'm sure the OS people were involved in making sure it runs on a PPC processor. I'm sure MS Research was involved in making the Xbox 360 as hackproof as possible. These synergies may not be immediately apparent, but they are very valuable.
Like I said, I'm sure in the short term breaking MS up will make the executives and existing share holders very rich (or even richer) but in the long run it will cause the death of a variety of devisions, and seperate they will all be more vulnerable to competition.
As such, the "breakup" of MSFT seems to be (and has seemed to be) a very good idea.
Was it SUN who said "The network is the computer"?
when that happens - and it is happening - WIN-anything is passe.
I do not see how transitioning to immature markets such as cellphones, gaming or consulting services is a sensible move. Its like throwing your crutches away before your bones have healed. Whats going to support you?
If you were Bill Gates, and you were not just in it for the share price (how many billions do one person really need) but also for the pride of your creation, what would you advise the board to do? I would suggest they would look at what others had been successfull at (e.g. Playstation, Google search, Palm PDA's) and use their billions to take over those markets, and intergrate it with the core business to protect it long term. I cant see what other course is sensible over the longer term.
If that is behind the potential breakup of uSoft we'll see Gates touting more app-stuff than OS-stuff.