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Comments on: Palm, Microsoft and Verizon Announce Press Conference

Ed Colligan, Palm, president and chief executive officer; Bill Gates, Microsoft chairman and chief software architect; and Denny Strigl, president and chief executive officer of Verizon Wireless, are holding a press conference on Monday in San Francisco.
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Palm & Windows

Ezra4no1 @ 9/23/2005 5:35:29 PM # Q
So.. Does this mean Palminfocenter will now be a WM site too??


http://mypdacorner.blogspot.com/

RE: Palm & Windows
neuron @ 9/23/2005 5:40:38 PM # Q
It depends on the definition of PalmInfocenter. If Palm means Palm OS, then no treo 700w. If Palm means Palm.com, then treo 700w will also be discussed.

RE: Palm & Windows
Admin @ 9/23/2005 5:51:53 PM # Q
I definitely plan on covering (& reviewing) the Palm Treo 700w. I will be in attendance at the press conference too.

I'm sure many PIC readers will be more than curious about this device.

-Ryan

RE: Palm & Windows
sr4 @ 9/23/2005 5:55:19 PM # Q

And subsequently, will you be reviewing PPC software/compatible hardware e.g. SanDisk WI-FI + 256MB SD Card, not to mention all the software that will be made WM5 and square screen compatible?

http://www.bargainpda.com/default.asp?newsID=2122

Surur

RE: Palm & Windows
svrontis @ 9/23/2005 6:58:33 PM # Q
Ryan,

In case the 'three wise men' take questions from the floor, please consider adding the following to your list:

1. How much money (if any) was Palm paid by Verizon (or M$) to cover the development costs on the rumoured 700w?

2. Are other carriers to have access to the rumoured 700w, or is this just for Verizon?

3. How many units has Palm contracted to deliver to Verizon and over what period? Is this a 'take or pay' arrangement?

4. Does Palm have contracts with HTC to tie in production? If so, does this take up all of HTC's capacity (so that others have to stand in the queue)?

5. Will Verizon provide funding to Palm to provide sufficient working capital to allow a big increase in production?

6. Will Verizon continue to offer the Treo 650?

7. Will Verizon drop HP and other smartphones?

I'm sure that others have lots of other questions too.

RE: Palm & Windows
sr4 @ 9/23/2005 7:13:54 PM # Q

I actually do not think a WM Treo will do well. Gartner says most PDA buyers are actually upgraders. I think POS also said 72% of its Treo buyers are experienced POS users already. I believe one of the main reasons for the Treo's success (besides the form factor) is simply that some of those 10 million POS user base are now upgrading to a viable converged device, and they only have one POS choice, the Treo. Unless, and even if the Treo 650 gets discontinued, POS upgraders will still prefer the 650.

Of course there is a possibility Palm may get buy in from current WM (ex Palm) users, but they are used to a wide range of choices.

This may turn into a disaster for Palm.

Surur

RE: Palm & Windows
Gekko @ 9/23/2005 7:22:36 PM # Q

The WM Treo will sell like hotcakes - initially. The problem for Palm come will come later when the genie is already out of the bottle and WM Treo sales start to cannabilize PalmOS Treo sales and then ultimately some commodity WM hardware maker comes in and offers a Treo-clone for half the price. What's Palm's value proposition at twice the price? That will be Palm's problem.

The problem for the PalmOS-loyalists will be that the PalmOS Treos will become the red-headed step-child of the Palm lineup and eventuallly discontinued for lack of demand. This is the classic negative spiral Gates talks about. Garnet has not/won't keep up with WM - especially under foreign ownership.

Palm's CFO said it best "No one ever got fired for buying MSFT."



RE: Palm & Windows
AdamaDBrown @ 9/23/2005 7:24:28 PM # Q
svrontis, to offer partial answers to some of your questions:

4. I doubt that this would take up all of HTC's capacity. They're already building the Treo 650, plus the Axims, some of the iPaqs, and all of their own PPC phones: that totals up to about 400,000 units a month. They're got to have some slack in there somewhere.

6. From everything that I've heard, Verizon (as well as everyone else) will continue to offer the 650 until the next Palm OS based unit is released, some time next year.

7. Verizon doesn't carry any HP PPC phones, all of HP's models are GSM (for all the good it does them).

Surur, look at the business market for a moment. The Treo has huge mindshare. Combine that with push email via Exchange, VPN, and all that, you've got a very attractive rival to the Blackberry. On top of that, many companies like to standardize on a single system, which a WM Treo syncing to Exchange would give them.

RE: Palm & Windows
svrontis @ 9/23/2005 7:44:53 PM # Q
Thanks, AdamaDBrown.

If Palm is to continue to make Palm 0S based Treos, then they will need to think again about the branding. You can just hear this question being repeated thousands of times around the country:

Q: What's the difference between the Treo 650 and the Treo 700w?

What's a 17-year old sales clerk going to say to that? Well, the 700 is bigger than 650, therefore it must be better or more advanced. (Which is debatable, IMO.)

RE: Palm & Windows
sr4 @ 9/23/2005 7:45:21 PM # Q
"PDA Market Set to Contract as From 2006

Revenue growth in the personal digital assistant (PDA) market will slow to 5.1 percent in 2005 (from 16.7 percent in 2004), and revenue will begin to gradually decline in 2006. Without the continued growth in Research in Motion's (RIM's) BlackBerry in 2005, the market would already be in a deep slump. PDA shipments are being adversely affected by smartphones, particularly in the Palm OS segment — users often upgrade to a Treo smartphone rather than to a new PDA."

http://www.gartner.com/DisplayDocument?doc_cd=126771

"They have quite a few older (PDA) models on the market and would like you to upgrade to a smart phone," Kort said. "They've abdicated they're position in PDAs in order to try to become a more successful smart-phone vendor. They just don't have the resources to try to fight battles on two fronts."
http://www.techweb.com/wire/mobile/162101554

The question is really, what percentage of current Treo sales are to individuals, and what percentage to enterprise. Gekko had to buy his own Treo.

Surur


RE: Palm & Windows
svrontis @ 9/23/2005 7:52:31 PM # Q
> The WM Treo will sell like hotcakes - initially. The problem for Palm come will come later when the genie is already out of the bottle and WM Treo sales start to cannabilize PalmOS Treo sales and then ultimately some commodity WM hardware maker comes in and offers a Treo-clone for half the price. What's Palm's value proposition at twice the price? That will be Palm's problem.

You're right, I guess.

But Wall Street doesn't normally think beyond this quarter's (or this year's) numbers. And with bonuses/options tied to share price performance, who can blame corporates for focusing on the short term?

Anyways, John Maynard Keynes* said 'in the long run we are all dead'. He was right about this (but so wrong on much else.)

* Footnote: A famous economist.

RE: Palm & Windows
sr4 @ 9/23/2005 7:55:48 PM # Q

It occurs to me that if Treo sales growth was due to enterprise then Palm Handhelds would not decline in concert, but if the buying public is choosing Treo's over Tungstens then one would have exactly that see-saw effect.

ie. Its not PDA's to consumers + Treo's to consumers + Treo's to business, but more
Less Lifedrives and Tungstens to consumers and more Treo's to consumers + small amount of Treo's to business.

The consumers are generally from a small fixed pot of PDA converts, a group which is only growing very slowly. Until PDA's really catch on in business it may be a zero sum game.

Surur

RE: Palm & Windows
Gekko @ 9/23/2005 7:56:13 PM # Q
>Gekko had to buy his own Treo.

My company offered to buy me one like they do for about 400+ other people in the company - BUT - there were a few catches: I'd lose my current phone number and they'd own the new number if I ever left, I'd have to switch to Sprint (instead of Verizon), I'd have to sync wirelessly with MS Outlook (no cable sync, no Palm Desktop, etc.), and they'd own the phone. You might think I'm carzy for turning down free hardware, but for $400, I'd rather just buy my own and own/control my own phone. I did, however, accept their free Dell Latitude Notebook though!!!

RE: Palm & Windows
Gekko @ 9/23/2005 8:04:23 PM # Q

surur - this was discussed here

http://tinyurl.com/bjrsy

RE: Palm & Windows
ocspub @ 9/23/2005 8:14:45 PM # Q
sr4> And subsequently, will you be reviewing PPC
sr4> software/compatible hardware e.g. SanDisk WI-FI + 256MB SD Card

Are you implying that the card is only PPC-compatible?

Oliver


Visit www.tapland.com for Zodiac news and discussion.

RE: Palm & Windows
sr4 @ 9/23/2005 8:15:04 PM # Q

I agree that enterprise would not generally buy disconnected PDA's (unless you work in the warehouse) but are they buying much more or much less than consumers. Its suspicious that Palm's sales remain flat, despite the growth of Treo shipments. As Ive said, to me it suggests a zero sum game, with consumers who (have older Palm's already) upgrading to Treo's instead of tungstens/zires/lifedrives. It if was consumers AND enterprise surely the POS pie would be growing, instead of shrinking, unless consumers are defecting to WM as fast as business/enterprise are replacing them.

Surur

RE: Palm & Windows
sr4 @ 9/23/2005 8:22:08 PM # Q
"Are you implying that the card is only PPC-compatible?

Oliver"

OS support for:

• PDA - PocketPC 2002, PocketPC 2003, Windows Mobile 2003

http://www.sandisk.com/retail/256mb-wifi-sd.asp

Yes

Surur

RE: Palm & Windows
sr4 @ 9/23/2005 8:25:14 PM # Q
Remember, Zodiac is dead.

Surur

RE: Palm & Windows
ocspub @ 9/23/2005 8:31:09 PM # Q
SR4> Remember, Zodiac is dead.

Mine isn't. And works just fine with that card. So I guess the correct answer would be "no."

Oh, and then I noticed WM 5.0 isn't listed among the supported operating systems you listed for the SanDisk card. Hmmm.

Oliver


Visit www.tapland.com for Zodiac news and discussion.

RE: Palm & Windows
sr4 @ 9/23/2005 8:42:54 PM # Q

All the more reason for the review when the updated drivers become available ;)

Surur

RE: Palm & Windows
AdamaDBrown @ 9/23/2005 9:54:28 PM # Q
It occurs to me that if Treo sales growth was due to enterprise then Palm Handhelds would not decline in concert, but if the buying public is choosing Treo's over Tungstens then one would have exactly that see-saw effect.
ie. Its not PDA's to consumers + Treo's to consumers + Treo's to business, but more
Less Lifedrives and Tungstens to consumers and more Treo's to consumers + small amount of Treo's to business.
The consumers are generally from a small fixed pot of PDA converts, a group which is only growing very slowly. Until PDA's really catch on in business it may be a zero sum game.

I see it more in a context of how much competition there is for each model. While there's a lot of competition in the smartphone market, the Treo is the only breakout success, so lots of people are buying Treos, even people who might not otherwise buy a typical Palm.

Meanwhile, Palm's traditional handhelds are suffering from an excess of competition: basic Zires are being challenged in the pure PIM market by more advanced cell phones, and the high-end market is being taken over by PocketPCs, which basically leaves Palm with the Tungsten E2 as its classic champion. So high-end and low-end sales are sagging, meaning a greater ratio of Treos to Tungstens and Zires being sold.

While there's a certain amount of truth that Palm lives on upgraders, that's not their only market. The Treo opened up more potential buyers. That's really the name of the game, and the reason that you want compelling--new buyers. Something like the Treo, or a cutting-edge traditional handheld, brings in new people because it's innovative and unique.

Oliver, no offense, but I've heard that old "X is dead" ... "Mine's not." response come from enthusiasts of all sorts of dead platforms. I'm glad that your Zodiac is still working, but without new units being sold, no new games, and little support, I think that most people would indeed label the Zodiac platform as being "dead."

RE: Palm & Windows
Foo Fighter @ 9/23/2005 10:17:20 PM # Q
>> "Remember, Zodiac is dead."

No! Zodiac is NOT dead. Mine is still running fine! Zodiac and PalmOS are doing just fine. The future is BRIGHT! Bright I say!

Sorry, just had to throw in the usual inane Palm apologist viewpoint for the sake of levity. ;-)

-------------------------------
Editor, http://Pocketfactory.com
Contributing Editor, http://digitalmediathoughts.com

RE: Palm & Windows
svrontis @ 9/23/2005 11:22:52 PM # Q
Congratulations, Foo_Fighther, you and the other Whiners have finally brought Palm low. You win. You must be very pleased (or, perhaps, you won't be satisfied until Palm is bankrupt). What did you gain from this?

RE: Palm & Windows
ocspub @ 9/23/2005 11:48:44 PM # Q
Foo> No! Zodiac is NOT dead. Mine is still running fine!
Foo> Zodiac and PalmOS are doing just fine. The future is
Foo> BRIGHT! Bright I say!

Well, looking at your site, it has quite a bit in common with the Zodiac. A very polished, well-done product, alas with no success in the market, it seems.

Oliver

Visit www.tapland.com for Zodiac news and discussion.

RE: Palm & Windows
ocspub @ 9/23/2005 11:52:49 PM # Q
ADB> Oliver, no offense, but I've heard that old "X is dead"
ADB> ... "Mine's not." response come from enthusiasts of all
ADB> sorts of dead platforms. I'm glad that your Zodiac is
ADB> still working, but without new units being sold, no new
ADB> games, and little support, I think that most people
ADB> would indeed label the Zodiac platform as being "dead."

No offense taken. I've been using a Treo 650 as my primary handheld for four or five months. Not because the Zodiac was dying but because I got tired of carrying two devices (I joined the convergence camp again). That said, Zodiac owners who bought the device primarily as a PDA aren't in a significantly different position than, say, Treo 600 or Tungsten T3 owners. It's not being produced anymore, and so the community isn't growing, but most existing and upcoming PalmOS software will continue to work fine. The two-year-old hardware is competitive with many other current devices. And it even supports some hardware that our friend Surur figured was PPC-only (and on top of that, probably has been discontinued by SanDisk anyway).

If you read some of my posts over on Tapland, you'll find that I don't have any problems with Palm, Inc. making Windows Mobile devices. If that's what it takes to create shareholder value and keep/increase their workforce, I am all for it. Doesn't mean that it's the right platform for me at this time.

Oliver


Visit www.tapland.com for Zodiac news and discussion.

RE: Palm & Windows
AdamaDBrown @ 9/23/2005 11:57:35 PM # Q
Damn, this had been such a nice and substantiative thread with a low insult content.

RE: Palm & Windows
AdamaDBrown @ 9/24/2005 2:46:06 AM # Q
To clarify for any future readers, my last message was referring to the two posts prior to Oliver's reply, which hadn't shown up yet when I posted my message.

RE: Palm & Windows
joad @ 9/24/2005 3:02:38 PM # Q
People are upgrading from PDAs to smartphones in droves because of one simple fact: they were tired of the ease with which they could run programs in all that RAM Palm built into PDAs. (Of course, too much RAM was also scaring the children).

You aren't a REAL Palm user until you can figure out how to squeeze all your applications and data into the 16-20MB of available RAM in a Treo, stuff a bunch over to the SD card with Powerrun, VFS, and other hacks, and then make that damn thing run all day without too many resets or other conflicts and delays. Only high-powered professionals have the right to say "sorry I lost you, my damn Treo phone rebooted again!".

Now, the Microsoft faithful will no longer be left out of this unique bragging right. After all, nobody has ever been fired for saying their Microsoft operating system has blue-screened again, in fact they're usually promoted to CIO.

More RAM is for babies, I'm looking forward to the day when I can buy a 512KB Treo for a "subsidized" price of $900.00 - that's when the REAL geniuses step up to the plate and try making anything run on them.

I run Windows XP with 16MB of RAM, that's PLENTY of RAM for anyone who knows what they are doing - just make a HUGE page file and go out for a movie while the machine boots up and does any sort of "computing." Only lazy "power users" would insist on installing much more RAM than that - and Microsoft was not as steadfast as Palm has been at rebuffing your selfish, selfish demands. That's why M$ has come to the Palm, not the other way around, bucky. Palm has that "vision" thing that daddy Bush talked about.

Again, too much RAM is killing the PDA market, scaring the children and driving people to Smartphones. You heard this analysis here first, kids.

RE: Palm & Windows
Foo Fighter @ 9/24/2005 9:57:24 PM # Q
>> "Well, looking at your site, it has quite a bit in common with the Zodiac. A very polished, well-done product, alas with no success in the market, it seems."

Uh..my site is not successful? Hmm. Better tell that to Dell, HP, Microsoft, Palm, Nintendo, Adobe, Macromedia, Sony, etc., that send me review products, prominently list me on their sites, and send me review units to write about. Not to mention all the traffic I'm getting to my site.

Oh, you mean that you think my site isn't successful because I don't build a community around it? Well, that is purely intentional, as your childish spouting and bitter whimpering is a is a classic example of why I don't want (or need) to surround my site with posters such as yourself. Stay away from my neck of the woods, if you please. Go back to your dying site...and handheld.

-------------------------------
Editor, http://Pocketfactory.com
Contributing Editor, http://digitalmediathoughts.com

RE: Palm & Windows
Timothy Rapson @ 9/25/2005 12:39:40 PM # Q
Foo, I think he was commenting on Svrontis (is that SRauly?) site, Tapland.

Joad. I don't know if I understood 1/10th of you point about memory and that, but it was a gas to read.

Surer and AdamaBrown. It is going to be an interesting year or two, watching to see if the overall market for PDAs?SmartPhones combined grows or just replaces the current market size of the two combined. One big thing to throw in is that Treos that were selling for $300-400 AFTER contract, are now selling for as little as $150 after contract. If volume grows and this price drop is not just the sellout at the end of the T650s life cycle that will go back up when the T700P (I am assuming that the new models will be called Treo 700P and Treo 700W. We'll know more tomorrow.) are released. Keep that price up and they will get nowhere in the market against the now, nearly free RIMS or more capable PPCs.

I can't see the enterprise preferring either of these models that allow the user to add on software that will cause all sorts of grief, over RIMS that will just do what the admin buys them to do. Just my take.


RE: Palm & Windows
sr4 @ 9/25/2005 2:36:03 PM # Q
That's one of WM 5's advantages. They can actually lock down the device and not allow ANY software to be installed that has not being digitally signed by admin. They are serious about matching RIM feature for feature, and making it an easier and more flexible platform.

Rim should be shaking in their boots. The CEO will get a Treo 700w next year. His Exchange server will have the Messaging and Security service pack installed already, so all admin will have to do is check a few boxes, and he will be up and running. No additional cost besides the cost of the device. Now all the rest of the execs will want one, and if they buy their own it wont cost the company anything. 2 years later RIM will be a forgotten memory.

Surur

RE: Palm & Windows
fishtastic @ 9/25/2005 6:11:11 PM # Q
There is one great big elephant in the corner that PALM are ignoring with this 700:

This is a really poorly specced WM machine, you can't compete if your phone is crap compared to the competition. The only thing it has going for it is the treo keyboard.

Fish

UGLY bidding WAR for PalmSource. Fo' shizzle ma bizzle!
Snoop_Doggy_Dogg @ 9/26/2005 12:04:14 PM # Q
http://www.sec.gov/Archives/edgar/data/1178056/000119312505190744/dprem14a.htm

Background of the Merger

PalmSource’s board of directors has periodically discussed and reviewed PalmSource’s business, strategic direction, performance and prospects in the context of developments in the PDA, smartphone and feature phone markets and the competitive landscapes in which PalmSource operates. PalmSource’s board has also at times discussed with senior management various potential strategic alternatives involving possible acquisitions or business combinations that could complement and enhance PalmSource’s competitive strengths and strategic position.

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Recognizing the maturing of its core PDA business, during the fiscal year ending June 3, 2005, PalmSource began to transition its business model to address potential new growth opportunities in the broader phone market. As part of this strategy, in January 2005, PalmSource completed its acquisition of China MobileSoft Ltd., the parent of a Nanjing, China-based developer and licensor of software for mobile feature phones, a potential new platform for Palm OS outside of the current smartphone market. In addition, PalmSource announced a corporate restructuring on June 29, 2005, which included a 16% reduction in PalmSource’s U.S. headcount. PalmSource intended the restructuring to streamline its operating infrastructure, focus its product development activities and accelerate the integration of the China-based engineering resources into PalmSource’s global product development efforts

Between late May 2005 and July 2005, PalmSource was approached by ACCESS Co. and by a communications technology company, Nokia, on an unsolicited basis, to discuss a potential strategic relationship. This led in each case to unsolicited indications of interest in acquiring PalmSource.

Having received two unsolicited inquiries regarding a potential acquisition, on July 6, 2005, PalmSource’s board of directors approved engaging financial and business advisors to assist PalmSource in evaluating its strategic alternatives. In addition, board members Gassée, Finocchio and Keever were appointed as a committee to oversee, on a day to day basis, the process of reviewing strategic alternatives and to report back to the entire board with respect to material developments and recommendations. The board of directors also subsequently engaged an outside consultant to assist the committee in its activities.

On July 13, 2005, the committee of the board interviewed potential financial advisors to advise the company with respect to the unsolicited inquiries and the company’s strategic alternatives and, on July 18, 2005, PalmSource engaged Jefferies Broadview.

Following Mr. Finocchio’s resignation from the PalmSource board of directors on July 18, 2005, Dr. Shoven was named to the committee.

On July 18, 2005, members of the committee and PalmSource’s senior management met with representatives of Jefferies Broadview and representatives of Howard Rice Nemerovski Canady Falk & Rabkin (referred to in this proxy statement as Howard Rice), PalmSource’s external legal counsel, to discuss the initial inquiries and to discuss a process to consider strategic alternatives. A list of companies that could potentially have an interest in discussions with PalmSource was compiled and reviewed during the meeting. Three companies in addition to ACCESS and Nokia were selected by PalmSource for initial contact by Jefferies Broadview.

On July 19, 2005, Messrs. Nobuya Murofushi and Koichi Narasaki from ACCESS Co. met with the committee, PalmSource’s senior management and representatives of Jefferies Broadview to discuss the rationale and strategy for a potential acquisition.

During late July and early August 2005, Jefferies Broadview was in contact with ACCESS Co., Nokia and three other communications technology and mobile computing companies to discuss a potential strategic transaction with PalmSource. One of these other companies determined it was not interested in considering the opportunity. The remaining companies, ACCESS Co., Nokia, Palm and Motorola, conducted preliminary diligence on PalmSource and held various meetings with members of the committee, PalmSource’s senior management and representatives of Jefferies Broadview during late July and early August 2005.

During August 2005, Motorola determined that it was not prepared to make a proposal to acquire PalmSource, leaving ACCESS Co., Nokia and Palm in the process.

On August 18 and 19, 2005, ACCESS Co. and Nokia provided initial indications of interest to acquire PalmSource at prices in the range of $12.25 to $12.75 per share in cash.

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On August 19, 2005, the committee met with PalmSource’s senior management, representatives of Jefferies Broadview and the outside consultant to the committee to review the status of the process being conducted by Jefferies Broadview and the indications of interest received from ACCESS Co. and Nokia.

On August 20, 2005, Palm provided its initial indication of interest to acquire PalmSource at a price of $11.00 per share in half cash and half stock.

On August 21, 2005, PalmSource’s board of directors held a special meeting at which PalmSource’s senior management, representatives of Jefferies Broadview, representatives of Howard Rice and the outside consultant were present to discuss the status of the process and the initial indications of interest received from the three potential bidders. Howard Rice advised the board with respect to its fiduciary obligations with respect to a transaction of the type proposed by the indications of interest and the standard of care that would have to be satisfied under Delaware law in meeting those obligations. Based on the initial indications of interest that had been received from ACCESS Co. and Company A and taking into consideration PalmSource’s prospects as a stand-alone entity, the board of directors decided it was in the best interests of the stockholders of PalmSource to continue the process and to provide ACCESS Co. and Nokia with the opportunity to conduct broader diligence on PalmSource. The board of directors determined that Palm's bid was not competitive with the other bids and directed Jefferies Broadview to inform Palm that it would not be allowed into the next stage of the process based on its current bid. In addition, PalmSource directed Howard Rice to begin preparation of a draft merger agreement to present to the bidders.

On August 21, 2005, at the direction of the board of directors, Jefferies Broadview contacted Palm and informed Palm that it would not be included in the next stage of the process because its initial indication of interest was not competitive. On August 24, 2005, Palm provided a revised initial indication of interest at a price of $13.00 per share and on August 25, 2005, Palm was provided the opportunity to conduct broader diligence on PalmSource.

Following the August 21, 2005 PalmSource special board meeting, at the direction of the board of directors, Jefferies Broadview contacted two additional companies, a communications technology company and a network computing company, to gauge their interest in a potential strategic transaction with PalmSource. Both of these companies subsequently indicated that they were not interested in pursuing a transaction.

During the period beginning August 22, 2005, with respect to ACCESS Co. and Nokia, and beginning August 25, 2005, with respect to Palm, through September 6, 2005, the bidders met with members of PalmSource’s senior management, members of the committee and the outside consultant and conducted in depth diligence on the business, technology, operations and financial condition of PalmSource. A draft merger agreement was provided to each of the three bidders during this period. Counsel for each of the bidders and representatives of Howard Rice exchanged drafts of the merger agreement and negotiated with respect to the terms of each of the three proposed merger agreements, including terms related to the potential structures for the transaction, treatment of employee equity incentives and the scope and content of the disclosure schedules.

On September 5, 2005, ACCESS Co., Nokia and Palm provided bids to acquire PalmSource at prices in the range of $13.00 to $14.00 per share. ACCESS Co. and Nokia proposed all cash transactions, and Palm proposed a half cash and half stock transaction.

On September 5, 2005, the committee met with PalmSource’s senior management, representatives of Jefferies Broadview, representatives of Howard Rice and the outside consultant to review and consider the three bids. The committee directed Jefferies Broadview to instruct the three bidders to provide final bids on September 7, 2005.

On September 6, 2005, the committee and PalmSource’s senior management met with members of Nokia's senior management. At this meeting, Nokia presented its strategy if the proposed strategic transaction were to proceed and Nokia acquired PalmSource.

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On September 6, 2005, PalmSource’s senior management and Jefferies Broadview held meetings with senior management of Palm to conduct diligence on the bidder’s business and financial condition given that Palm was offering stock as a part of the consideration for the transaction.

On September 6, 2005, PalmSource’s board of directors held a special meeting at which PalmSource’s senior management, representatives of Jefferies Broadview, representatives of Howard Rice and the outside consultant were present to discuss the status of discussions with ACCESS Co., Nokia and Palm and to review their bids. There was extensive discussion about the transactions proposed by the three bidders, the different structures and consideration being offered, the risks and benefits of each structure and the financial condition of each of the three bidders.

On September 7, 2005, ACCESS Co., Nokia and Palm provided revised bids to acquire PalmSource in the range of $15.00 to $15.90 per share. The proposed nature of the consideration being offered by the three bidders remained unchanged from the initial bids.

On September 7, 2005, PalmSource’s board of directors held a special meeting at which PalmSource’s senior management, representatives of Jefferies Broadview, representatives of Howard Rice and the outside consultant were present to review the revised bids to acquire PalmSource. Further discussion was held about the proposed transaction and the relative risks and benefits of proceeding with each bidder. During the board meeting, PalmSource received increased bids from ACCESS Co. and Nokia and discussed with all three bidders the prospects of obtaining higher offers. Palm did not increase its bid during the meeting. ACCESS Co.’s last and highest bid to acquire PalmSource was for $17.00 per share in an all-cash transaction. The last and highest bid from Nokia to acquire PalmSource was for $17.25 per share in an all-cash transaction, conditioned on completion of merger agreement negotiations and execution of a definitive agreement prior to the opening of market the next day. The board of directors concluded that Nokia had made the highest bid and Jefferies Broadview delivered its oral opinion that, as of September 7, 2005, based on and subject to certain assumptions, qualifications, limitations and factors, the $17.25 in cash per share to be received by holders of PalmSource common stock was fair, from a financial point of view, to holders of PalmSource common stock. Howard Rice summarized legal and contractual issues relating to the proposed transaction, including the status of the merger agreement, the disclosure schedule and closing conditions to which the transaction would be subject. PalmSource’s board of directors then informed Nokia that it had authorized its senior management and counsel to proceed on the basis of the $17.25 per share bid, conditioned on completion of merger agreement and disclosure schedule negotiations and execution of a definitive agreement.

After the September 7, 2005 special board meeting, negotiations continued between counsel for Nokia and Howard Rice concerning the terms of a definitive merger agreement and the related disclosure schedule.

Very shortly after the September 7, 2005 special board meeting, ACCESS Co. submitted to PalmSource by e-mail an unsolicited increased offer to acquire PalmSource for $18.50 per share in an all-cash transaction. Mr. Gassée, members of PalmSource’s senior management, representatives of Jefferies Broadview, representatives of Howard Rice and the outside consultant then discussed this higher offer. It was determined that a special board meeting needed to be convened on September 8, 2005 to consider the higher offer. Jefferies Broadview was directed to inform the financial advisor to Nokia that a higher offer had been received and that the PalmSource board of directors was reviewing the higher offer. Through the night of September 7, 2005 and into the morning of September 8, 2005, representatives of Howard Rice continued to negotiate the terms of definitive merger agreements and disclosure schedules with counsel to ACCESS Co. and counsel to Nokia.

On September 8, 2005, PalmSource received a letter from Nokia demanding that PalmSource enter into an agreement with Nokia based on the $17.25 price. ACCESS Co. was apprised of the receipt of that letter.

14

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Table of Contents
On September 8, 2005, PalmSource’s board of directors convened a special meeting at which PalmSource’s senior management, representatives of Jefferies Broadview, representatives of Howard Rice and the outside consultant were present to discuss the ACCESS Co. $18.50 bid and the demand letter from Nokia. Howard Rice again advised the board with respect to its fiduciary obligations. The board of directors directed management to continue negotiations of the terms of the definitive merger agreements and disclosure schedules with ACCESS Co. and with Nokia. The board of directors adjourned the meeting and set a time for reconvening later that day.

During the adjournment of the September 8, 2005, special board meeting, at the direction of the board of directors, Jefferies Broadview contacted ACCESS Co. to have ACCESS Co. confirm its bid at $18.50 and Howard Rice continued to negotiate with counsel to ACCESS Co. and with counsel to Nokia the terms of definitive merger agreements and disclosure schedules.

Later on September 8, 2005, PalmSource’s board of directors reconvened and was presented with the terms of the definitive merger agreement and disclosure schedule that had been negotiated with ACCESS Co. PalmSource’s senior management, representatives of Jefferies Broadview and representatives of Howard Rice were present when the board reconvened. Jefferies Broadview discussed the financial capability of ACCESS Co. to close the transaction. Howard Rice summarized legal and contractual issues relating to the proposed transaction with ACCESS Co., including closing conditions to which the transaction would be subject. Jefferies Broadview reviewed its financial analysis of the merger consideration proposed in the ACCESS Co. transaction. Jefferies Broadview then rendered its oral opinion, subsequently confirmed in writing, that, as of September 8, 2005, based on and subject to certain assumptions, qualifications, limitations and factors described in the Jefferies Broadview opinion, the $18.50 in cash per share, as such amount may be adjusted in accordance with the merger agreement, to be received by holders of PalmSource common stock pursuant to the merger agreement was fair, from a financial point of view, to such holders. During the course of the meeting, representatives of Nokia contacted Jefferies Broadview to inform Jefferies Broadview that Nokia was prepared to discuss an offer that was above their last offer price but was still below ACCESS Co.’s offer. This information was communicated to the board of directors, but no further bid was made by Nokia. By the unanimous vote of directors present at the time of the vote, PalmSource’s board, among other things, duly approved the merger agreement with ACCESS Co. as being in the best interests of the stockholders of PalmSource and directed that the merger agreement be submitted to PalmSource’s stockholders for adoption at the annual meeting with the recommendation of the board that PalmSource’s stockholders adopt the merger agreement at the annual meeting. During the special meeting, PalmSource entered into the merger agreement with ACCESS Co.

Following the special meeting and later that evening, the transaction was publicly announced in both Japan and the United States and, on September 9, 2005, PalmSource filed a Form 8-K with the SEC describing the transaction.

Other Recent Events

On September 13, 2005, Nokia submitted a letter to PalmSource demanding payment of $8,697,595 and stating that Nokia intended to file a complaint against PalmSource in Delaware Chancery Court for New Castle County if the payment was not made by September 16, 2005. The letter enclosed a copy of a draft complaint against PalmSource alleging a claim for breach of contract. In the letter and in the draft complaint, Nokia generally alleged the following: (i) PalmSource and Nokia entered into a purported merger agreement, (ii) PalmSource elected not to proceed with the purported merger agreement with Nokia, and (iii) PalmSource must pay Nokia $8,697,595 in connection with a termination provision in the purported merger agreement. In a letter to Nokia dated September 16, 2005, PalmSource denied all of Nokia's allegations and maintained that PalmSource did not enter into a definitive merger agreement with Nokia. On September 20, 2005, Nokia sent a response to PalmSource’s September 16, 2005 letter stating that Nokia would withhold further action until at least October 1, 2005.




Fo' shizzle ma bizzle

RE: Palm & Windows
cervezas @ 9/26/2005 12:33:20 PM # Q
Why did you edit the text of the filing to insert "Nokia" in place of "Company A"?

David Beers
Pikesoft Mobile Computing
www.pikesoft.com
Software Everywhere blog
www.pikesoft.com/blog
RE: Palm & Windows
SeldomVisitor @ 9/26/2005 1:23:43 PM # Q
Giggle.

RE: UGLY bidding WAR for PalmSource. Fo' shizzle ma bizzle!
Palm_Otaku @ 9/27/2005 2:38:24 PM # Q
On what basis did you include Nokia, Palm and Motorola as the specific parties mentioned in the document?

A partially-educated guess?

The SEC filing mentions Companies A, B, C, D and one other that was approached, but only specifies that Company A is a "communications technology company".

It would be very interesting to hear the reasoning behind the identities of the players...

Reply to this comment

Need so big announcement?

neuron @ 9/23/2005 5:35:58 PM # Q
I know it is a big move, but does it really need three chairmen hold press conference together?

RE: Need so big announcement?
LiveFaith @ 9/23/2005 10:36:44 PM # Q
neuron,

Mark my words on this one ...

It's more than you think. It's a three way merger that will be announced. M$ world software dominance + Verizon's dominent networking & telcom + Palm's dominant mobile hardware innovation will be announced as PalmVeriSoft. With yet another logo.

It will rival and overcome Sony, Google, Nokia, the UN and even George W. Bush's ability to cause hurricanes like Katrina. The biggest suprise is that it won't be Gates at the helm, but rather Palm has already lobbied and won Mr. David Nagel as head of the new conglomerate. Bill will quietly step back.

Microsoft's Longhorn will come bundled with 64-bit Cobalt, Plinux and Frankengarnet emulation standard and will run on all smartfones, all future Palm (except Z22 & Z33) and WM PDAs. What's really noteworthy is that it will be released on June 6th, 2006 (6/6/6) as proof that Gates is the antiChrist who will usher in the new world order, battle of Armegeddon, global thermonuclear war and a worlwide chip under the skin ID system.

The Treo 700w is just a decoy and it's worked great so far.

Pat Horne; www.churchoflivingfaith.com

RE: Need so big announcement?
Timothy Rapson @ 9/25/2005 1:09:23 PM # Q
LiveFaith, WOW, that is exactly what I was thinking. The release will be a 6:66 AM on June 6th. Exactly is written, the end of the world with the release of Longhorn as predicted long ago. (who uses that tag?)

So, do you have pictures of the New Treo 666 model? with all top and bottom menu stuff from that OSes on the screen, there should be room for only two lines of text in the middle left of the display.

Actually, we've already seen the horned Treo 666 at Engadget last year. This would have to be the Treo 666WPL model.

Reply to this comment

Apocalypse Now

Gekko @ 9/23/2005 5:37:02 PM # Q

"And I looked, and behold a pale horse: and his name that sat on him was Death, and Hell followed with him. And power was given unto them over the fourth part of the earth, to kill with sword, and with hunger, and with death, and with the beasts of the earth." - Revelations 6:8



RE: Apocalypse Now
adamsmark @ 9/23/2005 5:41:46 PM # Q
Perhaps, or perhaps not.

I tried Windows CE and hated it. Bought a Palm V.

I've been using Palm OS for years now, but could consider a shift. I tried Pocket PC, and it works fine.

Hope Palm sticks with the Palm OS, but it's nice having choices.

RE: Apocalypse Now
rasty @ 9/23/2005 5:54:01 PM # Q
Of course is nice having choices, that's why everyone hopes Palm will keep on doing POS products since we already have enough WM/PPC producers out there!
Not the other way around... ;)

RE: Apocalypse Now
Ronin @ 9/23/2005 5:57:14 PM # Q
Gekko,

I am right there with you on this one.

As the song goes: "It's the end of the World as we know it."

In the Spirit of Umoja,
Ronin

And I feel fiiiiine...
AdamaDBrown @ 9/23/2005 6:14:26 PM # Q
Really, it's not as bad as all that.

RE: Apocalypse Now
sr4 @ 9/23/2005 6:17:51 PM # Q

Gekko, are you posting on 1src looking for a fight? I would so love to rub Jeff K.'s face in it, but I rather not waste my effort. Its so funny to see Jimmie "lapdog" Geddes swing with the Jeff K. wind and talk about choice now.

Surur

RE: Apocalypse Now
Gekko @ 9/23/2005 6:41:07 PM # Q

Fight? No, man. I'm a lover, not a fighter.

It's all just a bunch of naive, gullible kids over there - along with their head scout leader.

post your thoughts here - you can be sure he's reading.

Surrender
Gekko @ 9/23/2005 6:51:13 PM # Q

The formal Japanese signing of the surrender terms took place on board the battleship USS Missouri in Tokyo Bay on September 2, 1945.



RE: Apocalypse Now
sr4 @ 9/23/2005 7:06:14 PM # Q

Well, as some-one mentioned there on PSRC, Jeff is perpetuating a new shared delusion that the world is going to segregate into USA=WM, Europe=Symbian and Asia=POS. Ive even heard tis repeated in 3 other podcasts. Its complete nonsense, and MS would not be satisfied with that situation in any case. Yet people are completely uncritically lapping it up. Its scary how naive and gullible they are. They want to believe.

Surur

RE: Apocalypse Now
Gekko @ 9/23/2005 7:12:22 PM # Q

kirvin keeps moving the marker. when msft was on their own 20 yard line, he said they will never get any further. when they were mid-field, he said that would be it. and now they are on palm's 20 yard line and he's saying they might score a field goal but never score a touchdown. so much for our industry expert.

(pleaes forgive the American footbal analogy)

RE: Apocalypse Now
cervezas @ 9/26/2005 12:09:04 AM # Q
Surer wrote:
Well, as some-one mentioned there on PSRC, Jeff is perpetuating a new shared delusion that the world is going to segregate into USA=WM, Europe=Symbian and Asia=POS. Ive even heard tis repeated in 3 other podcasts. Its complete nonsense, and MS would not be satisfied with that situation in any case. Yet people are completely uncritically lapping it up. Its scary how naive and gullible they are. They want to believe.

Uh... for those of us who don't spend all our time following what Jeff Kirvin is sayig just so we can make fun of him on PIC, why exactly would Jeff or any other US-based Palm enthusiast "want to believe" that Palm OS is going to fall to Microsoft in the US and only be available in the Asian market?

Am I missing something here?

Also, if you're trying to make a point about these guys being uncritical in their judgment, how about offering us a little critical judgment of your own? I don't even know what your argument is here (if there was one). Is there some new data that Microsoft has stopped losing market share to Symbian in Europe and to Linux in Asia? Show us your numbers, man. Do you have some reason that you believe it's going to do so in the future? Cool, how about sharing that with us?


David Beers
Pikesoft Mobile Computing
www.pikesoft.com
Software Everywhere blog
www.pikesoft.com/blog

RE: Apocalypse Now
sr4 @ 9/26/2005 2:25:53 AM # Q

The delusional belief is that POS is strong enough to take over Asia. Its trying to keep hope alive. POS has always been way strongest in America, has a very poor presence in Asia, and has had an even worse performance in Europe recently. Regarding MS vs Symbian, its really MS vs Nokia, and its still very early in that game. Notice all the carrier branded phones are coming out on European networks (XDA for Vodafone, MDA for T-mobile, VPA for O2 etc) vs the strong branding of Nokia. MS is playing to the interests of the carriers, and getting to Nokia in that way. MS has clearly said Nokia is squarely in their cross-hairs.

http://www.theregister.co.uk/2002/02/28/the_ms_plan_for_smartphones/

Surur

RE: Apocalypse Now
cervezas @ 9/26/2005 1:22:38 PM # Q
Surer wrote:
The delusional belief is that POS is strong enough to take over Asia.

Well of course that's delusional. Palm OS isn't strong enough to keep its own sister company from delivering handsets with Windows Mobile. From the handset maker's standpoint, it's got all of the disadvantages of Windows Mobile as a proprietary system with very little compensating edge.

What's delusional is to ignore the fact that Microsoft doesn't have so much as a pot to p*** in when it comes to the Asian market. Linux smartphones are beating them four times over, despite the fact that the phone makers currently have to do most of the work themselves to create a UI framework, application stack, etc.

Now, we can debate about whether Palm OS for Linux will fill the mobile Linux framework void and whether phone makers care about time-to-market or think their customers will care whether their phones have thousands or merely a handful of software titles to choose from. But knocking down straw men is just a way to avoid that discussion, Surer.

Or at least it has been so far.

David Beers
Pikesoft Mobile Computing
www.pikesoft.com
Software Everywhere blog
www.pikesoft.com/blog

Reply to this comment

What's the agenda?

T_W @ 9/23/2005 6:16:38 PM # Q
Will Colligan be bowing down and/or committing seppuku?

RE: What's the agenda?
ptc @ 9/23/2005 9:55:28 PM # Q
Or getting on the knee-pads?
RE: What's the agenda?
LiveFaith @ 9/23/2005 10:56:35 PM # Q
That brand new big orange Palm is about to get the juice squeezed out of it. Wooooooooooooooooooooooooooot!

Pat Horne; www.churchoflivingfaith.com
RE: What's the agenda?
rcartwright @ 9/24/2005 10:11:07 AM # Q
Pat,

Most of these folks are not going to get the UT Big Orange reference.

"Many men stumble across the truth, but most manage to pick themselves up
and continue as if nothing had happened."
- Winston Churchill

Reply to this comment

We need another Palm OS device maker.

VampireLestat @ 9/23/2005 6:26:55 PM # Q
Can someone please beg Sony to come back into the market so we can boycott that Fn scumbag Ed Colligan?! Backstabbing betrayer.

RE: We need another Palm OS device maker.
ginsberg @ 9/23/2005 6:35:20 PM # Q
In case you had not noticed, it was Palmsource (previously Palm Solutions Group) that was merged with Be, Inc. and charged with developing Palm OS 6 (Cobalt). Because Gassee, Nagel, Mace, Homer and others who bombed-out of Apple took Cobalt down the same path they took Copeland ten year earlier, we are left with the ancient Palm OS 5.

Small companies like PalmSource generally do not recover from catastrophic mistakes such as Cobalt. That's why PalmSource is being acquired and why Palm and Colligan had little choice but to move to a modern platform where they could survive, instead of following PalmSource and Palm OS into oblivion.

RE: We need another Palm OS device maker.
adamsmark @ 9/23/2005 6:38:52 PM # Q
If Sony returns with tiny styli, they should stay out.

RE: We need another Palm OS device maker.
SeldomVisitor @ 9/23/2005 7:13:33 PM # Q
I think ACCESS must be encanting these very words right now.

RE: We need another Palm OS device maker.
Jeffry @ 9/24/2005 2:28:35 AM # Q
Reply to this comment

Everybody has been waiting for this!

ray00pal @ 9/23/2005 6:25:49 PM # Q
Isn't this exciting? Two of the best players in the field are teaming up to bring us the best products!!! Just when you thought Palm is out of the game and here they come. You can never count them out!

Now palm can have VGA screen too and Palm can also bring in a lot of its previous customer to the Windows world. No longer live under a big shadow in fear.

Sony should have learned the lesson that they should once in a while work with other company too. No more stupid memory stick, MD, and beta tape.


RE: Everybody has been waiting for this!
T_W @ 9/23/2005 6:40:29 PM # Q
That is exciting!!!

Can you provide more information? Who are these two "best players" and when will there be more details? I cant wait to see these best products!!!!!

On a side node, what do your comments have to do with the article which seems to mention a media event featuring:

1) A maker of buggy handheld devices
2) A maker of buggy operating system
3) A crappy telecomm provider?

Thanks much. Can't wait to get more details!!!

RE: Everybody has been waiting for this!
LiveFaith @ 9/23/2005 10:59:43 PM # Q
T W,

Read my post above about the meeting. It's gonna be a homerun!

Pat Horne; www.churchoflivingfaith.com

Reply to this comment

No, please!

javispedro @ 9/24/2005 6:49:07 AM # Q
No, no, no, it can't be true! What will our PPC friends/enemies say? What I'm going to do if I want to sync with Linux? How can I survive If I can't be confident to my PDA OS? What If I don't use stupid Outlook 2006 or whatever PPC needs?

What would happen if I wanted to run POS apps? Oh, StyleTap exists... Surely PalmOne didn't sue them because they know what they were going to do..

By the way... I still hope that on Monday they'll say they don't have any plans on a wince PalmOne device (cause PalmOne isn't Palm anymore, at least for me.)

RE: No, please!
joad @ 9/24/2005 3:28:55 PM # Q
Relax, this "announcement" was all an April Fool's joke designed by PalmOne.


...that's why it took them until September to release it.


BTW- they have a whole "family" of April Fools jokes finally coming out in beta - just hang back and enjoy.

Reply to this comment

A hollow Palm

Sam H @ 9/24/2005 7:24:05 AM # Q
"Every company that went onto Wintel ultimately hollowed themselves out. It was a self-imposed lobotomy. They're no longer R&D companies ... they were shareholder disasters."

- Scott McNealy, Chairman and CEO of Sun Microsystems.

RE: A hollow Palm
sr4 @ 9/24/2005 8:15:19 AM # Q
http://uk.finance.yahoo.com/q/bc?s=SUNW&t=5y

http://uk.finance.yahoo.com/q/bc?s=DELL&t=5y

http://uk.finance.yahoo.com/q/bc?t=5y&s=DELL&l=on&z=m&q=l&c=sunw

And a key collaboration began with Microsoft Corp. (MSFT ) on Windows-based technology for mobile phones. Now execs from New York to Shanghai use HTC-designed or manufactured devices.

Despite her rocky start, Wang is a Star because of her persistence in pushing her vision for the company. HTC now boasts a 950-person research and development team. "We are all about R&D and innovation. It's a given that we provide the best," says the economics graduate of University of California at Berkeley. Sales last year jumped 67%, to $1.6 billion, and profits soared 108%, to $123 million. HTC shares, traded on the Taiwan Stock Exchange, are up 86% since January. Wang's determination could take HTC to new heights.


http://www.businessweek.com/magazine/content/05_28/b3942425.htm

I'm sure these shareholders really hate what MS did to their companies. Scott McNealy especially would know everything about shareholder disasters.

Surur

RE: A hollow Palm
Sam H @ 9/24/2005 10:01:19 AM # Q
Just to prove you can show anything with charts, here's one of my own:

http://uk.finance.yahoo.com/q/bc?t=6m&s=DELL&l=on&z=m&q=l&c=sunw

I think you and I both know that Dell's high-volume, wafer-thin-margin model isn't the example you're looking for. And how much R&D does Dell do anyway?

"We are all about R&D and innovation.

Really? I always thought HTC was all about rock-bottom costs due to sweatshop labour.

RE: A hollow Palm
sr4 @ 9/24/2005 10:29:19 AM # Q

Dont be rediculous. So you think a sweatshop designed the Treo 650 and the HTC universal? So you think share performance over 5 years is not a reasonable measure of the leadership and stratergies of a company?

If you subscribe to Scott's view of taking on the world and losing, I hope you put your money where your mouth was
5 years ago and lost your shirt.

http://uk.finance.yahoo.com/q/bc?t=5y&s=MSFT&l=on&z=m&q=l&c=sunw

Surur


RE: A hollow Palm
Sam H @ 9/24/2005 10:54:08 AM # Q
Dont be rediculous. So you think a sweatshop designed the Treo 650 and the HTC universal?

Nope, I think a sweatshop helped build it though.

So you think share performance over 5 years is not a reasonable measure of the leadership and stratergies of a company?

Why over 5 years specifically? Seems like rather an arbitrary frame of reference. (I think you can do better than that.)

http://uk.finance.yahoo.com/q/bc?t=3m&s=MSFT&l=on&z=m&q=l&c=sun

;-)

I hope you put your money where your mouth was
5 years ago and lost your shirt.

I did rather well out of the dot-com boom, thanks.

RE: A hollow Palm
sr4 @ 9/24/2005 11:14:40 AM # Q

Because the long term is a good measure of a company's leadership and strategies. The only one trying to lie with graphs here are you. How about this one for about 20 years.

http://uk.finance.yahoo.com/q/bc?t=my&s=MSFT&l=on&z=m&q=l&c=sunw

More to the point, many companies have done well by partnering with MS. Its a lie that "Every company that went onto Wintel .... were shareholder disasters." However I know of many companies that became shareholder disasters by trying to go it alone. That is the simple point, and I do not know why you are still arguing that Scott was right, when he was clearly wrong. Hopefully Palm will benefit from this alliance, vs having the share price tumble in the long term, like Sun's has.

Surur

RE: A hollow Palm
Sam H @ 9/24/2005 11:34:48 AM # Q
Surur, comparing companies share prices using arbitary time points is the oldest trick in the book. You're going to have to do much, much better than that. And I'm not 'lying' with my graphs, I'm demonstrating how meaningless they can be.

Why are you posting graphs of Microsoft's share price anyway? We're talking about its licensees.

More to the point, many companies have done well by partnering with MS.

Well, we've debunked Dell and HTC. Who else did you have in mind?

However I know of many companies that became shareholder disasters by trying to go it alone.

That doesn't actually prove your point, does it?

Hopefully Palm will benefit from this alliance

In the short term I think Palm will do well with WM. In the long term - well, it's been a rather a long time since Palm have done anything genuinely innovative. I wonder if they still have it in them.

RE: A hollow Palm
Gekko @ 9/24/2005 11:37:28 AM # Q

Q&A with Michael Dell on R&D:

Are you beefing up R&D to make your consumer products more unique, or is it more the case of using your distribution muscle?

We have 3,600 folks in our R&D division and spend half a billion dollars a year, similar to the amount Apple spends. We don't think percentage of revenue is a good measure of success in R&D. We look at it as--what do we need to spend to accomplish what we need to accomplish?

But you feed off Microsoft and Intel R&D.

Our strategy for development is different than Microsoft's or Intel's. Those are ingredient companies. We're a computer systems company. We have a higher return on R&D than any other computer systems company, about five times the profit for every R&D dollar spent. A lot of companies say they're better than us because they spend more on R&D. What are they better at? A lot of the R&D spending is actually spent to protect things that are proprietary, of no benefit to the customer. We only do the kind (of R&D) that benefits the customer. We don't try to reinvent things that other companies have (invented).

What have you done specifically on the R&D side that you're proud of?

We've made products easier to use and service. We've innovated in time-to-market. Who had the first color notebook powered by batteries? It's Dell. There's this misnomer that companies that spend more on R&D are somehow better and more successful, but there isn't a lot of data to support that.

If you look at innovation, it doesn't just occur in the lab. Comdex is the place you go to show things that nobody knows what to do with, because they haven't found a market yet. We don't develop things nobody knows what to do with. We develop things people want to buy and buy in volume. Innovation can occur in supply chain and logistics, manufacturing and distribution, and sales and service. We've made computing products far more affordable. If you look at the cost of computers 20 years ago versus now, we've caused the whole industry to get more efficient.

How do you see your role in terms of design? Would you rather let someone like Apple take the lead?

We spend about as much as Apple in R&D. Just because we sell a whole lot more doesn't mean we're bad. I thought that was part of the objective.



RE: A hollow Palm
Sam H @ 9/24/2005 11:58:35 AM # Q
So Dell's R&D is into better box shifting.
RE: A hollow Palm
sr4 @ 9/24/2005 12:06:22 PM # Q

What exactly have you debunked?? Whats arbitrary about going from now till as far back as yahoo will let me? You've demonstrated short term fluctuations, and Ive demonstrated that Scott has not returned share holder value.

Surur

RE: A hollow Palm
Gekko @ 9/24/2005 12:15:38 PM # Q

Sam H - this one's for you:

29. Posted Sep 22, 2005, 1:31 PM ET by steve

You windows haters crack me up. I'm sure you look trendy with your Ipod, non starbucks coffee and VW passat but the truth is, it's a better OS. My 650 reboots or locks up at least 3 times a day. My Windows Mobile phone didn't do it once. Get over your trendy Micro$soft attitude and while you're at it, take your John Kerry sticker off. You lost already.



RE: A hollow Palm
joad @ 9/24/2005 3:34:59 PM # Q
We ALL lost.

RE: A hollow Palm
Sam H @ 9/25/2005 2:13:23 PM # Q
What exactly have you debunked??

That Dell and HTC aren't technological R&D companies.

Whats arbitrary about going from now till as far back as yahoo will let me?

'How far back yahoo will let you' is an arbitrary point. If you want to make a meaningful analysis of Sun's share price, try correlating it with actions Sun has taken.

You've demonstrated short term fluctuations, and Ive demonstrated that Scott has not returned share holder value.

See previous point.

You windows haters crack me up. I'm sure you look trendy with your Ipod, non starbucks coffee and VW passat but the truth is, it's a better OS. My 650 reboots or locks up at least 3 times a day. My Windows Mobile phone didn't do it once. Get over your trendy Micro$soft attitude and while you're at it, take your John Kerry sticker off. You lost already.

LOL! He's absolutely right of course, if we use Linux then the terrorists have already won!

Reply to this comment

Verizon's Unlimited Data Plan Pricing

Gekko @ 9/24/2005 11:33:41 AM # Q

I hope part of this announcement is a lowering of Verizon's Unlimited Data Plan pricing. The current $45 a month is a little too salty.



RE: Verizon's Unlimited Data Plan Pricing
joad @ 9/24/2005 3:36:19 PM # Q
Somehow Sprint has been able to offer unlimited data for the past couple years at $10-15 WITH extras tossed in, and AFAIK they are still in business. Heard they even bought up Nextel.

I see absolutely no discernable difference in the Western US and US major cities between Verizon and Sprint's coverage. Somehow, Verizon STILL gets customers for their higher priced voice and their skyrocketed-high price data charges. The Treo is all digital, leaving Verizon's GTE analog legacy a non-factor.

Verizon ought to be paying their marketing staff in gold dubloons for continuing to sell the same thing Sprint sells at 23% of what Verizon charges. PT Barnam's got nothing on them...



Reply to this comment

Marty Fouts, David Schlesinger, David Beers?

Gekko @ 9/25/2005 10:12:30 AM # Q

Where did the Three Amigos go? It looks like they skipped town as fast as they came. Too bad, as I was anxious to hear their spin on this one.



RE: Marty Fouts, David Schlesinger, David Beers?
SeldomVisitor @ 9/25/2005 10:25:48 AM # Q
Their boss(es) found out they were publically posting AND noting their employer (as opposed to publically posting anonymously)?

RE: Marty Fouts, David Schlesinger, David Beers?
sr4 @ 9/25/2005 10:35:17 AM # Q
I am gratified that their astroturfing efforts has been immortalized in google. When Access "streamlines operations" their future employees will only have to type Marty Fouts's name in google, and his posts here will be the second link.

http://www.google.com/search?q=Marty+Fouts

Unfortunately there is a famous David Schlesinger already, but is you add Palm to the name his atrocious behavior and psychotic beliefs will be available on the very fist link.

http://www.google.com/search?hl=en&lr=&q=David+Schlesinger+palm

Surur

RE: Marty Fouts, David Schlesinger, David Beers?
hkklife @ 9/25/2005 10:56:03 PM # Q
A shame that the mass exodus of the PalmSource staffers also took TVoR with it. I've missed the usual wit, banter, and insider scoop(s) in the past week. Plenty of polite discussion over the new WinMob Treo and the new Palms for the fall but it's almost been TOO quiet. The biggest mudslinging has been over who likes the T|E formfactor and who doesn't...

RE: Marty Fouts, David Schlesinger, David Beers?
cervezas @ 9/26/2005 1:00:25 AM # Q
Oh, I'm here, sort of. Just getting kinda bored with the high drama queen quotient and low substance on these threads.

I feel like the really big battles still lie ahead for Palm OS when the smartphone market gets bigger. This thing with the WM Treo is still just the pre-season and we're only in the second quarter.


David Beers
Pikesoft Mobile Computing
www.pikesoft.com
Software Everywhere blog
www.pikesoft.com/blog

RE: Marty Fouts, David Schlesinger, David Beers?
AdamaDBrown @ 9/26/2005 3:21:47 AM # Q
This thing with the WM Treo is still just the pre-season and we're only in the second quarter.

I do believe that that's called shameless mixing of metaphors.

RE: Marty Fouts, David Schlesinger, David Beers?
AdamaDBrown @ 9/26/2005 3:25:14 AM # Q
On second thought, never mind, I think I see what you were saying.

RE: Marty Fouts, David Schlesinger, David Beers?
SeldomVisitor @ 9/26/2005 6:41:12 AM # Q
Hey - I liked the mixed-metaphor slant!

Lol!

RE: Marty Fouts, David Schlesinger, David Beers?
twrock @ 9/27/2005 4:18:29 AM # Q
A shame that the mass exodus of the PalmSource staffers also took TVoR with it.
I think he's back.

I'm still waiting for the mythical "color HandEra."
Reply to this comment

A Ship without an engine control

Timothy Rapson @ 9/25/2005 1:22:36 PM # Q
What this shows is that Palm is a ship without control of its own engine room.

When PalmOne really needed Cobalt done and done properly, PalmSource showed up with "THE MESS". Lately, PalmSource promised to clean up "THE MESS" with Palm Linux, but how could PalmOne trust them after they botched up PalmOnes whole market? How could PalmOne wait two more years of coasting in a fast moving market? They couldn't. So, they told PalmSource (the engine room of the ship) to prepare to be boarded and taken over or else.
PalmSource pulled this odd deal with Access out of their hat and P1 was so mad they told that guy who quit PS just before the developers conference early this Summer, "Sell out to us so we can get complete control of the OS and get a decent competitive product out before we're crushed, or we will buy our phone OS from MS. We may not be able to beat you up, but our big brother Bill can beat up any big brother you have!"

All the mixed metaphors; ships, bullies, and engines, aside we now have the bottom line, Palm MUST hope WinMob and Bill save them. PalmSource MUST hope Access saves them.

I see all handheld ships sinking and it won't be pretty.

RE: A Ship without an engine control
ozz @ 9/25/2005 2:56:32 PM # Q
Aren't we just rearranging the deck chairs on the Titanic?
RE: A Ship without an engine control
twrock @ 9/26/2005 12:36:40 AM # Q
Palm MUST hope WinMob and Bill save them.

I'm still working on any good reason for "Bill" to do anything to save them. Absolutely he will show up at the "gathering" and sound all excited about the huge "potential" that Palm brings with them as they now join with the rest of the Mob. But anything more than that? Only as much as is needed to ensure the death of PalmSource/Access. Maybe I'm missing something, but after that happens, I can't imagine any reason.

I'm still waiting for the mythical "color HandEra."

RE: A Ship without an engine control
SeldomVisitor @ 9/26/2005 6:43:06 AM # Q
> ...PalmSource pulled this odd deal with Access
> out of their hat...

The PSRC filing on the 23rd shows just how odd it was.

Based on that filing, quite possible more fireworks October 1st.

RE: A Ship without an engine control
cervezas @ 9/26/2005 9:04:16 AM # Q
SeldomVisitor wrote:
The PSRC filing on the 23rd shows just how odd it was. Based on that filing, quite possible more fireworks October 1st.

Why? Because they showed a loss? Hardly a surprise right now since they're back in building mode and there's been no traction by Cobalt yet. Certainly no surprises here for ACCESS.

What's more interesting in that filing is the composition of PalmSource's business: 39% decrease in licenses for PDAs and 80% increase in licenses for smartphones. The smartphone growth hasn't been enough to balance the loss of PDA revenue so far, but that's because it was growing from a smaller base. Now we're at the point where Palm OS smartphones and PDAs are almost equal. Even if the Treo 700w cannibalized half the sales of the "700p" and Palm OS smartphones grew by only 40% (and ACCESS probably estimated something like this) Palm OS is still much better positioned than MS or Symbian to grow in the biggest smartphone market: Asia.

You guys need to lighten up.


David Beers
Pikesoft Mobile Computing
www.pikesoft.com
Software Everywhere blog
www.pikesoft.com/blog

RE: A Ship without an engine control
svrontis @ 9/26/2005 9:17:25 AM # Q
> PalmSource pulled this odd deal with Access out of their hat

I doubt those guys could arrange a beer in a brewery.

No, this is a 'friendly' take-over. It works something like this:

1) A bidder approaches the target's board of directors to try to secure their support for an acquisition. (Otherwise, the bidder faces the risk of running the price up by making a bid on-market or to avoid the ugliness of a proxy-fight.)

2) The target's board consults the lawyers. The lawyers warn the directors about their duties to the shareholders. After they take a stiff drink to settle their nerves (and check their D&O cover), the board hires an investment bank to seek out other offers.

3) The investment bank then puts together an proposal which they shop around to a gaggle of people who might be interested (everyone from industry players to private equity funds - foreign & domestic). The proposal usually paints a rosy picture of the company's position, prospects, etc (ie, it's close to a pack of lies).

4) If the investment bank gets any bites, they arrange a quiet auction - pitting one bidder against another. This can take anywhere from 2 weeks to 2 years. It all happens behind the scenes, since the board is usually petrified about making a public annoucement of any kind. However, the investment bank and any serious bidder usually employ negotiation tactics of various kinds (including feeding stories to 'friendly' reporters, getting brokers to write favourable/unfavourable reports, etc).

5) The highest bidder normally (but not always) wins the auction. The board announces the deal to the public. Sometimes there are dissident shareholders to placate, but usually they are smart enough to take the money and run. According to the investment banks, everybody lives happily ever after (as long as they don't read the purchaser's financial statements for the next 5 years).

That's the general approach, but there are many variations on the theme (limited only by the cunning of the participants).

Timothy, don't you have some homework to do?

RE: A Ship without an engine control
SeldomVisitor @ 9/26/2005 10:03:37 AM # Q
> Why? Because they showed a loss? ...

You are discussing the September 22 filing.

My post was about the September 23 filing.

RE: A Ship without an engine control
sr4 @ 9/26/2005 10:07:43 AM # Q
svrontis, thats the most sensible and informative post I've ever seen you write. Did you not leave out a step though where the companies interested have to do "due dilligence
checks, including access to the other companies accounts, before they can proceed with buying it?

Surur

RE: A Ship without an engine control
svrontis @ 9/26/2005 10:20:14 AM # Q
It depends. Sometimes a 'data-room' is set up by the target (which is managed by the investment bank), where they make available a few tons of documents. The documents often conceal more than they reveal. Sometimes, the board refuses to participate in detailed due diligence, for fear of being accused of insider trading.

Surur, your naivete is endearing (as always).

RE: A Ship without an engine control
cervezas @ 9/26/2005 11:09:51 AM # Q
My post was about the September 23 filing.

Got a link?


David Beers
Pikesoft Mobile Computing
www.pikesoft.com
Software Everywhere blog
www.pikesoft.com/blog

RE: A Ship without an engine control
SeldomVisitor @ 9/26/2005 11:14:59 AM # Q
If this gets deleted because some admin doesn't like long links, so be it - I'm too lazy to indirect through another site:

-- http://secfilings.nasdaq.com/filingFrameset.asp?FileName=0001193125%2D05%2D190744%2Etxt&FilePath=%5C2005%5C09%5C23%5C&CoName=PALMSOURCE+INC&FormType=PREM14A&RcvdDate=9%2F23%2F2005&pdf=

RE: A Ship without an engine control
cervezas @ 9/26/2005 11:24:16 AM # Q
Ok, so back to my original question (since I won't have time to read that till tonight): what is it about the filing that shows how odd the merger is, SeldomVisitor?

David Beers
Pikesoft Mobile Computing
www.pikesoft.com
Software Everywhere blog
www.pikesoft.com/blog
RE: A Ship without an engine control
cervezas @ 9/26/2005 11:31:27 AM # Q
Here's a short link that won't blow out the page:

http://tinyurl.com/bhszc


David Beers
Pikesoft Mobile Computing
www.pikesoft.com
Software Everywhere blog
www.pikesoft.com/blog

RE: A Ship without an engine control
SeldomVisitor @ 9/26/2005 11:39:33 AM # Q
> ...what is it about the filing that shows how
> odd the merger is, SeldomVisitor?

There were multiple bidders, a dramatic bid war, and the winner lost and is threatening to sue.

Other than that, nothing!

Giggle.

RE: A Ship without an engine control
sr4 @ 9/26/2005 12:02:14 PM # Q

Since there's $8,600,000 at stake, I'm sure we will soon find out who Company A is.

Interesting that Access came in with an initial $12/ share bid. At $18.50 I sure hope they do not have buyers regret. Their period for "broader dilligence" was pretty short (August 25 till September 9 or less).

Surur

RE: A Ship without an engine control
cervezas @ 9/26/2005 12:36:01 PM # Q
Company A is a "communications technology company." In other words, a competitor to Palm in the smartphone handset space. Anyone who hoped to see any future at all for Palm OS PDAs should thank their lucky stars that ACCESS came in with that 11th hour (or 12:01) high bid. What do you suppose Nokia would have done with PalmSource, hmmm?

Colligan must have been sweating bullets. I almost wonder... Hmmm, wouldn't it have been in Palm's interest after they dropped out of the bidding to offer ACCESS a little under the table help with their bid? Could that last $1.50 a share that ACCESS added to their bid come from a deal they closed with Palm, who was desperate to keep Palm OS out of the hands of a competitor like Nokia?

If it's true, this could go a long way toward explaining why the bidding went so high: it factored in not just the licensing income that ACCESS expected to get from the Palm OS, but some kind of payment from Palm as well.



David Beers
Pikesoft Mobile Computing
www.pikesoft.com
Software Everywhere blog
www.pikesoft.com/blog

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