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Indepth On 3Com and Spinning Off The PalmPilot
We recently covered the possibility that 3Com would spin-off their PalmPilot division. There's been an increasing amount of confirmation about this move, and C|Net has done an indepth look at the story. From the perspective of how business operates, it's an interesting story alone, but it's even more curious in light of the recent announcement regarding the Handspring. Where do you folks see the PalmPilot ending up?
1) I wonder if Hawkins & Co. didn't have some sort of card of their sleeve for this. Maybe, as a price for parting amicably, they got a license for the OS. It seems obvious now why Hawkins and Dubinsky bolted... they had a vision for the Palm that included expansion and driving the units down lower in the market. Palm itself seemed happy to be making expensive nerd toys. They probably had a good grip on the arms they needed to twist in order to get what they wanted. And, on the surface, licensing the OS doesn't seem like a dumb thing to do... expand the platform's acceptence, yaddah yaddah. It's only when Handspring proves they can make a better Palm than you for less money do you smakc yourself in the forhead and yell "d'oh!"
2) I dunno. I sort of doubt that Dubinsky and Hawkins would have been dumb enough to walk onto a plank that someone could snatch out from underneath them, though. They didn't make the Palm #1 by being dumb.
3) 'Cause it's neat? Cause you could link a whole lot of them together and get a Beowolf cluster less powerful than a standard desktop? The nerd's urge to do inappropriate things with inappropriate hardware just is. You shouldn't question it, because sometimes the results are useful. Like the personal computer, for example.
I think 3Com spinning Palm off will allow Palm to adopt and change more quickly. It will be easier to innovate. It will be a better company for the most part. I just worry though that smaller companies such as Palm and Handspring won't have the deep pockets to weather the constant pounding of the WinCE storm. Every company is bound to slip once in a while, I think this is where Palm is now. They have a near perfect product and rested for a second while a competitor (Handspring, which is very good. They are growing the total market, not taking away 3Com's sales.) caught up. I'm sure by spring we will be hearing about a Palm X which will have the expansion slot and everything else, but until then we are left to wonder if little companies without deep pockets can survive. Remember, buyouts and mergers seem to be all the rage; is this the future for the new PalmCo? Sollowed up by someone else?
The palm's PRESENT handwriting engine is Graffitti. We were instructed by the lord-hi-masters of /. to write about where we believed the FUTURE of the Palm was. Hence, I picked a small part of thier overall future. Any new handwriting engine will be ADDITIONAL to graffitti, not a replacement. But, like the Windowing front end to NT vs the command prompt, most people will use real handwriting over Graffitti.
Graffitti was 1st released as a product for the Newton to make up for the sucky nature of Rosetta 1.0. I understand why the ship date for the Newton was met, but the product was not ready. Memory of the sucky 1.0 release, combined with being mired in Apple is what helped to keep the Newton to what it was.
The last release of NI (Newton Intelligence) was 2.1, and the rosetta code in there works QUITE well. Combined with the 161 Mhz StrongARM processor and the handwriting is as good as it gets....Well, ok as good as it got. No hesitation, it just worked.
If it was said on slashdot, it MUST be true!
My impression was that 3com bought USR, who had previously bought Palm. They wanted the modem buisness and got the Palm as a bonus. They want to focus, so they let Palm go and keep a chunk of stock just in case. Makes sense to me. What I want to know is whether 3com is keeping the PalmOS. Does it leave with Palm computing or do they continue to license to both them and Handspring? That makes things more interesting.
Actually, with the ucLinux project, you can load Linux onto a Palm. However, you'd have to be a moron to delude yourself into thinking that Linux is any more useful on a PDA than Windows is. The vast majority of Linux programs are either too large for, incompatible with, or unnecessary on a small palmtop computer. By contrast, PalmOS (and, for that matter, WindowsCE) programs are designed to be used specifically on this hardware platform.
For more information, click here.
Palm has a ton of potential and a good chance of raising serious amounts of capital in an IPO. As an independant company, Palm has the best chance of getting the funding needed to battle MS-Wince.
Within 3COM, Palm is a nice, profitable unit, but not big enough to carry the company. 3COM would have to choose between financing Palm and putting more resources into the battle with Cisco.
By selling Palm off 3COM gets a good chunk of cash plus gives Palm the resources it needs to succeed.
It is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail. - Abraham Maslow
- Because they're not Apple.
:) - Yanking the rug out from under Handspring would be STUPID. It would build up ill will with your user base. Also, see above for advantages of third party Palm device makers.
- Now here I completely agree with you! I don't want a mini-PC, I want a pocket calculator that stores my grocery list!
JonSeriously, though, it is a good thing for them to let other companies build Palm spinoffs. It enhances the Palm OS's position as the OS of choice for PDAs, much like the PC clones did for Microsoft Windows. A greater number of Palm devices also gives the PalmOS more counter space at Overpriced Computer Retail Store.
In addition, the new licencees of the Palm OS are forced to try new things in order to differentiate their devices from 3Com/Palm's, so you will see more variety in software, or more radical features. Lots of these new features will tank, of course, but even so, Palm gets their money up front, and the failure of the 3rd party PDA won't really reflect badly on them. If a feature sells, Palm can add it to their lineup the next model year.
As to Handspring taking over from Palm, we'll wait and see. I expect Palm to slash prices on their devices. Since the Palms have less complicated hardware, are already in production, and don't have to pay for the OS licence, I expect them to be able to undercut Handspring's pricing. Plus, Palm has the advantage of being the recognized brand, whereas the Handspring carries the stigma of "Is it really compatible?"
Lastly, more Palm devices == cheaper prices for the CPUs and displays.
All opinions expressed herein are my own, and not those of my employers, who are appalled.
A response, in three parts =)
1: By licensing out their OS they can get a royalty per sale, much like M$ gets a fixed sum per PC sold because it comes bundled with the system, and not have to deal with the manufacture, sales, advertising, or development costs of actually building a system. In this case say Handspring outsells a Palm 3:1 because of price, features, and color--Palm still gets royalties which are essentially pure profit, as well as grabbing more market share because WinCE machines, if they couldn't keep up with the Pilot, they certainly can't keep up with the Visor.
2: I don't know. I don't think they will yank out from under Visor because in interviews they have explicitly said they want to avoid the traps and pitfalls that Apple has gone through =)
3: Because it's there. Because it's a Motorola 60480 whatever CPU that was in the MacII or something. Because they are bored. Because they are geniuses. Because they are morons. =)
-AS
-AS
*Pikachu*
But can you check your email? Can you pretend to take notes while your boss/professor yaks endlessly and really be playing Galax?
And if you can carry all your spreadsheets and important documents, appointment books, calendars and diaries (years and years worth even) in your pocket instead of having to lug a hefty briefcase or knapsack around, what's wrong with that?
Not all things trendy suck; sometimes it's just a case of the majority realizing that something really useful to a few people could be useful to them as well. Three years ago people used to bug me about my phone always being busy because they didn't understand why I needed the phone line (guess they thought my computer had a telepathic connection to my isp!), and now almost everyone I know has an email address.
Lia
Palm is doing very well. I simply can't understand why 3com would spin them off. 3com is pretty well known, and I think by losing the 3com name Palm will only be hurting themselves.
Wife
"So... you forgot our anniversary again?"
ermmmm... me
"Umm... no, i was just going to surprise you and give you a present on another day. you wouldn't be expecting THAT!"
Wife
"Well, that's it... i've had it with you... we're going to the doctor first thing in the morning"
you get the idea
"NOOOOOOOOOOOOOOOOOOO!"
Next Morning
Quack
"This is a relatively painless procedure. We simply replace many of the bones and tendons in the right hand of the patient with a PalmPilot. The retain full hand functionality out of some magical power of the PalmPilot, and they never forget a date, ever again!"
Wife
"Sounds wonderful. Go for it!" (In the background "...NNNNNOOOOOOOOOOOOOO...")
---------------------
The future of PalmPilot... interesting... scary... get your copy today!
*insert pithy sig here*
When Jobs cancelled the Newton spin-off, a group of 30+ Newton Engineers and support staff all left for Palm.
Given the printing engine is Apple's IP, and if Palm were to come out with a print-engine for the Palm, Apple would sue based on the 'fact' that their code was now on the Palm. (The truth of such is not important. The money for the Lawyers is what matters)
So, if Apple does a palm-based machine, the quid-quo-pro will be the rights to the handwriting engine.
The Second thing on tap....a faster dragonball
If it was said on slashdot, it MUST be true!
By many people's estimates (including Microsoft, who has been laying deals left and right), the hand-held PC market is going to be a huge growth area over the next decade.
By spinning off the Palm division, 3com will still be maintaining a controling interest in the new firm, but more importantly, it will be able to financially benefit as their shares in the company rise to what I believe will be a very lofty height, as most "hot" items do.
Now he's making a competitor to the Palm. And 3Com (soon to be just Palm) is stuck catering to the high end corporate accounts that can afford to pay extra hundreds of $$ for units with no upgrade path that are essentially variations on a theme over and over again. The Vx is the exact same machine as the V, except more memory. Why didn't some genius figure out how to make the V expandable (that is, "officially" expandable)?
Hawkins and Handspring are taking a different approach. Lower the entry pricetag and target the consumer market. As a boss of mine said, "I've got kids entering college, there's no way I wouldn't get them one, priced right. But no way I'm spending $500 or more to buy them each a PalmV just because it's lighter." And the iMac-like (or is it Gameboy-like) color schemes don't hurt if you're going after a younger market. VP's may want the cool metallic look, but college kids want the yellow one or the orange one.
What was a primary complaint about the Pilot? Addon devices. It was just the right size to fit into a pocket, so as soon as you stuck something on it like a pager or modem, it got bulkier. Handspring solves that by introducing an upgrade slot (external, not like the PalmIII's!) that only adds "wheat thin" sized cards. How does 3Com solve the problem? By introducing a series of machines (the V series) that aren't upgradeable at all?!
I have a IIIx. I'm going to skip the V generation completely. Come Q1 next year, I'm probably going to become the first Visor person at my company. On top of everything else it's got going for it, it's still Palm compatible, so I don't even have to fight the wince vs palm battle.
d
www.HearMySoulSpeak.com
At one point, it apparently was a "genius" idea to centralize Palm as part of 3Com's largely networking-oriented organization.
Now, it is apparently time to run through the other side of the argument.
Which is opposite to what happened last year, but everyone thinks this is a brilliant idea too.
Scott Adams would be proud...
If you're not part of the solution, you're part of the precipitate.
Sooner or later Steve Jobs is going to buy them. 3com fought Apple off more than once, but now, if they are publically traded, all it takes is some money, and Apple has lots of cash right now.
The Wall Street Journal (and for the record, no, I'm not a subscriber... but that was all there was to read in the lunch room the other day... ) had an interesting take... Palm may be spun off to be able to get more and better employees.
The idea works like this: If you're a nerd living in Silicon Valley, you're going to go to a company that offers the best stock incentives. 3Com's stock now is, shall we say, not the best incentive there is. However, stock in a company that the soley Palm would be hotter, giving them better recruiting clout.
Interesting. I doubt this was the basis for the whole deal, but it may have played a part.