For a while “Palm Pilot” was a generic term essentially used to describe all PDAs (Personal Digital Assistant), sort of the way iPod is used to describe all Mp3 players. But today, as smartphones have merged the mobile handset with the PDA, Palm has fallen behind its rivals. It isn’t so much fading away say some, as it is just completely collapsing. How did this happen, what does it mean for business, and is it a warning for other businesses?
First, Palm is one of those companies that was suddenly everywhere. Palm Computing was actually founded in 1992 by Jeff Hawkins, and it did create one of the first PDAs for consumers and business users. This was called the Zoomer and the manufacturing was outsourced to Tandy and distributed by Casio. Interesting enough, it used a third-party operating system, which could explain in part why the device failed. Clearly, here is a case of having too many cooks in the kitchen. But then things got interesting. Palm was acquired by U.S. Robotics Corp. in 1995, which in turn was acquired by 3Com in 1997.
The original founders of Palm, however, were unhappy with the direction that 3Com was taking the Palm brand, and they left and founded a company that really got the ball rolling with PDAs – Handspring. While largely forgotten today, this company managed to make an affordable PDA that many considered the cat’s meow in the late 1990s. The Handspring Visor was one of the first devices to use the (then new) USB ports on the computer to synchronize the PDA with the desktop.
On the business front, what made the Handspring really interesting, as well, is that Hawkins and his partners licensed the Palm OS. So they had the best of both worlds. They had the solid and reliable operating system that they originally helped develop while at Palm and had corporate control at Handspring. Fate played a wild turn, as 3Com spun off Palm in 2000, which in turn merged with Handspring in 2003.
Thus taking the two companies full circle, with Palm eventually having a Handspring line for a few years. The Treo line, which was originally part of Handspring, was also used by Palm. The combined company was renamed palmOne, while the division that made the OS was further spun off as PalmSource. But this wasn’t to last, and palmOne eventually purchased PalmSource’s share of the “Palm” trademark, which cost the former $30 million. A palm by any other name? But this was just one questionable move for a company that seemed so smart.
In 2006 Palm introduced the Treo 700w, a Windows Mobile-powered device for Verizon Wireless. The smartphone was a combination of PDA and phone. In the pre-iPhone days the Palm devices weren’t merely smartphones, these were often described as genius. But was it really worth $30 million for the company to trade under PALM again (as palmOne it was trading under PLMO), especially as another firm (ACCESS) purchased PalmSource, later selling the rights to the source code back to Palm for $44 million. That earlier spin off seemed to be rather expensive.