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Opinion: Handspring Not Leaving the Palm OS

In a recent interview with Business 2.0, Handspring co-founder Jeff Hawkins said,"It's almost certain that we will have products that won't run Palm OS". This has been taken out of context by some to mean that Handspring is considering soon dropping the Palm platform and switching to another.

Nothing could be further from the truth. In the same article, Mr. Hawkins says, "We're very happy with Palm-and I mean that. All the products we want to build today, we can build with Palm OS." But this statement was skipped over by some who drew the wrong conclusion.

Handspring's other co-founder, Donna Dubinsky, has stepped in to try and clear up some of the muddle. She said yesterday that while Handspring may someday expand the number of operation systems they support, "We'll always have at least a major portion of our business in Palm". She went on to say her company saw no immediate need to use other OSs.

This is not a new position for the company. They have said in the past that if the market changes, they would consider another OS. Basically, they are covering all the bases. If, in a few years, Palm has lost its dominant position in the handheld market, Handspring would consider licensing whatever replaces it.

This isn't likely to happen soon. While Palm Inc.'s handhelds have slipped a bit from their previously astronomically high percentage of the market, the company that has gained most from this is Handspring itself. The Palm OS still commands 86% of all retail handheld sales.

They also said in the past they might also change if they saw a need to release a product that was simply impossible to create using the Palm OS. Both Mr. Hawkins and Ms. Dubinsky made it clear that this isn't happening, either. Mr. Hawkins said, "All the products we want to build today, we can build with Palm OS," while Ms. Dubinsky said, ""We're very happy with the Palm OS--we've been able to do everything we wanted to do".

A switch to another OS would be a large undertaking for the company. Creating a device that could still use Springboard modules while running a non-Palm OS might be an insurmountable hurdle. The applications that come pre-installed on the modules are Palm OS apps and Handspring would have to either produce a Palm emulation mode or convince the Springboard developers to rewrite their software.

An interesting question is whether Microsoft would allow Handspring to put the Springboard slot on a Pocket PC device. While this isn't confirmed, it appears that Microsoft requires its PPC licensees to use industry standard extension slots, like Compact Flash. Springboard is not an industry standard so there might be difficulties.

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Palm & Handspring are at War? Some thoughts to ponder...

I.M. Anonymous @ 4/5/2001 3:30:37 PM #
The debate goes on as to whether Handspring will leave the Palm OS or not. Interesting to see whether Palm will still license to Handspring the Palm OS after the agreement expires in 2003 (I believe). Handspring already cannibalizes potential device sales from Palm, meaning it is taking significant profits from Palm (hardware profits are so much higher than license profits). If Palm tries to raise its licensing fees, would Handspring stay?

Handspring folk already do a lot consulting work for Palm with regards to the OS. They are also a licensee of the AMX Kernel from Kadak that the Palm OS lays over. Would it be too far a stretch to clean build a new operating system?

There have been rumors that Handspring is looking at Windows CE, Linux, and even their own OS. Maybe they are just hedging their bets against the Palm OS. If the Palm OS doesn't evolve into a platform viable for the new form factors and functions Handspring wants for new products, wouldn't they switch?

Dubinsky and Hawkins do say they're happy with Palm OS, and there are comments they are sticking with them, but they only guarantee the near future. What is the near future to them? Maybe only until 2003? Of course they want to say they're happy with the Palm OS now so as not to upset current developers, but what do they really have in the works that we don't know about?

I'm not completely resolved with regards to the issue, but those are just a few more things to think about.

RE: Palm & Handspring are at War? Some thoughts to ponder...
Deslock @ 4/6/2001 9:05:17 AM #
Some uninformed anonynous person wrote:

"The debate goes on as to whether Handspring will leave the Palm OS or not."

OMG... Ibehindume you you joking. Did you actually read this article?

Any rumors that Handspring is looking at CE or another OS were started either by people who didn't read the interview (and decided to make some wild-assbehindumptions) or thought it would be fun to go trolling.

Handspring has no plans to leave PalmOS; Hawkins' quote was taken out of context. He thinks Handspring will someday produce a device that is not based on PalmOS because of how much mobile computing will likely grow. That doesn't mean that it'll be Handspring's next generation PDA or even a PDA at all. See the interview at:

http://www.business2.com/content/magazine/indepth/2001/03/26/28479

I was shocked that people have been spreading rumors that Handspring might switch from PalmOS (based on what he said in this interview). My favorite is this article by Jim Seymore, which is full of misquotes and misinformations:

http://www.thestreet.com/_yahoo/comment/techsavvy/1367399.html

In it, Jim Seymore wrote:

"Even Jeff Hawkins, the creator of the Palm OS, said in an interview published last week that Handspring expects to use another OS in its next-generation units."

Huh!? Apparently Jim Seymore didn't actually read Jeff Hawkins' interview either. I would guess that Ed posted this opinion article to clear things up and I am absolutely astonished that after reading Ed's article, you *still* think there is a debate.

RE: Palm & Handspring in the Future
Ed @ 4/6/2001 10:12:02 AM #
The Palm OS licencing fee is $8 per device now while Palm is still using all the licensees to help build up the market. Yes, Palm loses potential money on each handheld sold by a licensee but what they are really doing is buying the respect that comes to a company that controls a robust platform. What is good for Handspring is good for the Palm Platform is good for Palm. I sincerely believe that if Palm hadn't licenced the OS to Handspring they would actually make less money because fewer people would buy Palm OS handhelds made by any company.

However, in 2003 I believe that Palm will decide that the handheld market has matured to the point where it can begin charging more for a licence. Especially now that all the licensees have begun to offer high-end products with larger profit margins.

Even if it could, now would be a bad time to increase the licence fee. Handspring is still not a profitable company and the other Palm licensees really haven't found their feet yet. TRG announced a reorganization a few weeks ago and became HandEra. Sony's first versions of their products were a disappointment that haven't sold well. Whether Palm increases the fee in 2003 depends a lot on how well these companies are doing at the time.

But there can be little doubt that Palm wants to make more money from licencing. In fact, their long-term goal is to make a majority of their money from it and from the Palm.Net service. In order for this dream to become a reality, the licensees need to sell a lot more handhelds and Palm needs to charge a bit more for each.

I think it would be suicidal for Handspring to cancel their Palm licence just because Palm raised the cost a bit. And it would be suicidal for Palm to raise the fee to the point where Handspring had to change platforms. These two companies need each other and they will find a way to work together.

So please, the next time you read something that says Handspring is about to drop the Palm OS, please just chuckle condescendingly and stop reading. The person writing has no idea what they are talking about.

By the way, if you are curious about how the real competition handles this, I've been told that the CE licensing fee was $30 but it has been reduced to $10 after the platform didn't take off like Microsoft told everyone it would.

As for the idea that Handspring is going to switch to Pocket PC because the iPaq is selling so well, that's like saying Compaq was considering giving up Windows because the iMac was selling so well. You don't switch sides because the enemy wins a single battle, especially when your side is winning the war!

---
Plenipotentiary
Palm Infocenter

Unlikely...

I.M. Anonymous @ 4/5/2001 4:47:45 PM #
There seems to be a "tornado" sweeping around the Palm. The stock price of the Palm dropping waaaaaaaay down, mixed review about the m505 color screen and now Handspring hinting about branching out to other possible OS...

Well, this is very exciting for the media (frenzy), but if I was a developer for the PDA market, I'd still work on the Palm OS first. The reason is very clear, Palm still dominates the market share. Look at the battle between Mac & PC. When the PC industry took off, Macintosh was much superior to PC, but Apple lost out because the market dominance switched over to IBM/MS PC's. Not because PC was better than Apple, but because PC was cheaper to build and to buy. Macintosh's higher cost deterred average buyers.

Well, Palm is in a unique position because, they have or had (depends of who) a superior PDA (in terms of functionality), and they also have the market share. MS through PocketPC have done a good job of creating a admirable competition. However, their success will be limited by its market share. Only problem is that in order to pick-up market share, you need to have superior software and higher volume of software. People will choose palm as long as they have broader functionality and while it is cheaper. I'd love to buy iPac but it cost approximately $500-600 while Palm Vx costs $300-450 and I can do much more in my medical field with all the variety of software/shareware/freeware out there.

The bottom line; unless palm does something stupid like getting rid of it's OS licences or increase the price of their PDA; Palm OS, it's software, and hardware will continue to advance, proliferate, and dominate PDA market for the next 5 years.

P.S. No doubht that Palm have recognized that they need to produce a better and higher resolution screen for their PDA, but not yet. Probably within next 1-2 years when there is a need to produce multimedia intense hardware. I'm betting that this will happen when the wireless system is more accessable and more mature.

P.S.S. I thought long and hard about switching to iPac, but PocketPC just don't have the software support in the medical field that the Palm does. So, I'll hold on to my Vx for now and order the m505 when it becomes available within next couple of months...

Thanks for your attention... :)

Rumors on resolution, etc.
I.M. Anonymous @ 4/6/2001 9:42:39 AM #
The impression I have gotten is that the resolution issue will be addressed in Palm OS 5, at the same time they make the jump to the ARM processor. This makes sense, as it could be easily handled in emulation which will have to be done anyway. Better to make a clean quantum leap forward.

Pundits have been predicting the victory of WinCE/PalmPC for years and years. And yet their market share is dropping.

As far as licensing the PalmOS goes, I think Palm would be foolish to stop. Licencing the OS forces other people to do some of the risky innovation stuff, which Palm can then fold into their own devices, and it keeps them in a strong market position as the "real" Palm. Plus, the more PalmOS devices in the channel, the stronger Palm's position as the OS of choice. It probably hurts MS a lot more than Palm.

Jon Acheson

And maybe...

I.M. Anonymous @ 4/5/2001 10:50:50 PM #
And maybe this. Palm is definatly gonna raise the price of the OS license, seeing how so many people want it. Create stir that you won't be using it, lower their stock price, and make them lower the price of the OS, in order to keep you around.

Palm should spin off PalmOS

Legible @ 4/5/2001 10:30:25 PM #
If I were a licensee why should I bring all my secret plans to the PalmOS people just to have them leaked to the Palm device people whom I'm competing against?

In my opinion Palm should just spin off PalmOS, in a fashion similar to what 3Com did with Palm. In that particular IPO, shares in Palm were distributed to the existing 3Com shareholders. Thus everyone benefitted from the eventual unlocking of value. I guess this is entirely possible as Palm is already reorganising its hardware and software into separate "divisions".

Also in such a fashion all licensees are satisfied that there's no conflict of interest within Palm itself. Some licensees may even see a strategic need to co-invest in the company. Surely for Palm this means that some very useful allies may be "locked in".

It would, in fact, be the new PalmOS Inc's best interests to "propagate" to as many licenses as possible and not just to keep it to "interesting niches" like what Palm's doing now. This is likely to have the effects of keeping device prices affordable and to expand the market even further. A win-win for consumers and Palm shareholders alike.

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