Palm R&D Spending Down Slightly

Posted By: Ed Tuesday, January 15, 2002 1:41:24 PM

Palm Inc. has released detailed financial information from its last quarter and it shows that the company, despite running in the red, is keeping its priorities in the right places. It's research and development budget did drop a bit but it was only 8% less than the same quarter the previous year and 8.5% less than the prior quarter. While any decrease in R&D spending in a technology company isn't good, an 8% drop is fairly minimal considering Palm's revenues were down 44% compared to the same quarter the previous year.

This shows up clearly in another figure: R&D expenses were equal to 13% of Palm's revenues, as compared to 7.8% for the same quarter a year ago.

In raw numbers, Palm spent $37.7 million on R&D during its most recent quarter and $78.9 million over the last six months.

According to Palm, "the decrease in absolute dollars reflects decreased personnel and project expenses." This is their way of saying they had some layoffs and dropped some projects, like their online portal, MyPalm.

Palm simply can't afford to cut too much out of their R&D budget. They are in the process of creating OS 5, which could very well be a make-or-break project for the company and the whole Palm platform. OS 5 is the next generation of Palm operating system which will make the jump from Dragonball -based handhelds to much more powerful ARM-based ones.

Palm also needs to develop hardware to run the new OS. While the company has just completed spinning its software division off as a subsidiary, the two parts are still reporting combined financial results. This should change at the end of this quarter.

Palm made much larger cuts in its advertising budget. Sales and marketing expenses were $60.8 million for its last quarter, decreasing by 32% as compared to the same quarter the previous year.

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What are they spending R&D on?

I.M. Anonymous @ 1/15/2002 2:13:39 PM #

They stole most of OS 4 from Handspring and VFS from Sony?

RTFA

I.M. Anonymous @ 1/15/2002 2:16:52 PM #

Did you read /any/ part of the second half of the article? Or are you troll and throw in that same question whenever palm's R and D budget gets mentioned, whether it makes any sense or not?

RE: What are they spending R&D on?

I.M. Anonymous @ 1/15/2002 2:35:32 PM #

I was referring to the former R&D expenditure, not the latter.

RE: What are they spending R&D on?

I.M. Anonymous @ 1/15/2002 3:22:43 PM #

Palm didn't start working on OS 5 last Thursday. They showed a working prototype off more than a year ago.

RE: What are they spending R&D on?

bcombee @ 1/15/2002 4:45:20 PM #

Stole most of OS 4 from Handspring? Huh?

The only part of OS 4 that has clear Handspring heritage is the 16-bit color support. Their USB support was done differently from Handspring and uses a different codebase, and VFS, while originating at at Sony, was developer with supervision and guidance from Palm's R&D department.

Don't forget that OS 4 had Attention Manager (a well-thought out method for organizing alarms and notifications) and a major rework of the Exchange Manager to support other media than IR. OS 4 also added the phone driver concept and subsystems; its too bad those haven't been used on any of the smartphones yet.

RE: What are they spending R&D on?

I.M. Anonymous @ 1/15/2002 5:24:39 PM #

The code for Palm USB syncing was written by Handspring.

RE: What are they spending R&D on?

Scott @ 1/16/2002 12:25:33 PM #

OS 4 also has several small but significant improvements to the web clipping model.

RE: What are they spending R&D on?

I.M. Anonymous @ 1/16/2002 6:42:27 PM #

Actually VFS didn't originate at Sony. It was designed and implemented at Palm, with some feedback from Sony. The only part written by Sony was the FAT filesystem library.

More info?

Foo Fighter @ 1/15/2002 2:26:02 PM #

Is there a link to a news article?

Ed....

Foo Fighter @ 1/15/2002 2:54:28 PM #

Where are you getting this information. I just visited Palm's site, and it offered no new details on the company's financials. Wah?

RE: More info?

Ed @ 1/15/2002 3:20:36 PM #

It's the first link under "Related Information":
http://biz.yahoo.com/e/020114/palm.html

If you have a question like this in the future, always look under "Related Information:" first.

---
News Editor

RE: More info?

Foo Fighter @ 1/15/2002 3:27:44 PM #

Thanks.

Maybe a stupid question.. What is R&D?

I.M. Anonymous @ 1/15/2002 4:34:44 PM #

Thanks^^

RE: Maybe a stupid question.. What is R&D?

I.M. Anonymous @ 1/15/2002 4:40:54 PM #

Research and Development

RE: Maybe a stupid question.. What is R&D?

I.M. Anonymous @ 1/15/2002 6:10:39 PM #

Recreation & Donuts!!!

it's not how much you spend but on what

I.M. Anonymous @ 1/15/2002 7:25:40 PM #

Palm proved itself to me when it decided to hire the Be engineers. They will definitely come up with lots of cool stuff without spending too much
AriB

RE: it's not how much you spend but on what

I.M. Anonymous @ 1/16/2002 4:52:48 AM #

Spending 13% of gross revenue on R&D is OK, but really successful companies often spend 20% or more on developing new products. I'm hoping that Palm make every $ count.