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Here’s a bit of sad news. The beleaguered Palm Inc. has put itself up for sale, working with Goldman Sachs and Qatalyst Partners to try to find a buyer, Bloomberg reports.

As we previously reported, Palm has been having a hard time lately as its devices simply failed to find a market. Word of the sale comes as no surprise; sooner or later something like this had to happen. In a way, history is repeating itself, because the original Palm ran out of money and had to sell itself to US Robotics shortly after getting started.

If any one company could be said to be synonymous with the original e-book revolution, it would be Palm. The original Palm Pilots were the devices that first hooked people on e-reading.

An editor of science-fiction books that I know fell in love with the Pilot when he realized that he could put an entire manuscript into a box that weighs 4.7 ounces and fits into his jacket pocket. "You really have to have spent a decade of your life schlepping 600-page manuscripts around to understand how attractive this is," he says. He admits that he wouldn’t use the Pilot’s tiny screen — it’s smaller than an index card — for major editing. But, he says, "An enormous amount of what an editor has to do day in and day out is just reading. These days, if I can get an e-text version of a big document I have to read, the first thing I do is hot-sync it onto my Pilot."

It is probably a measure of how quickly we get used to improvements that looking back at that original 160×160 resolution black-and-white LCD screen now would seem like reading on a pocket calculator. But back in those days, it was the height of e-reading convenience.

Even Microsoft was stuck playing catch-up, coming out with a product it unbelievably tried to get away with naming “Palm PC” before Palm litigated to force a change to “Pocket PC”.

The Corporate Shuffle

Looking back at the Palm story brings up a spate of old brand names we haven’t heard of in years. Who would have thought back in the early ‘90s when half the modems on the market were “US Robotics” brand that it would be remembered now for buying Palm in 1995 before itself being bought by 3Com in 1997?

Palm itself was no stranger to company shakeups, of course. The original Palm Pilot’s creators, Jeff Hawkins and Donna Dubinsky, left the company to found rival Handspring, maker of the Visor and the original Treo. Then 3Com spun off Palm in 2000, and it merged with Handspring in 2003.

For a time, Palm itself even dabbled in e-books, buying Peanut Press and renaming it Palm Digital Media, before selling it again to someone else who renamed it eReader.

Resting on Laurels

Palm used to be the big name in hand-held technology. The Palm OS was licensed and built into an amazing number of hand-held utility tools—bar-code scanning inventory tagging systems. Shipper package tracking tools. You name it, there was a Palm for it.

But now Palm’s share of the marketplace is in the single digits—and it was ailing even before the failure of the Pre, as I noted back in 2008. Why?

My guess is that it’s something like the way trucking edged out trains for long-distance transportation. It’s an oft-heard, pithy aphorism that the railroads declined because they forgot that they weren’t in the railroad business, they were in the transportation business.

I think that, even though it created the first smartphones, Palm still thought it was in the PDA business. It didn’t really know what to do with smartphones. And then first Blackberry (which started out as little more than a pocket device for receiving e-mail) and Apple came along to eat its lunch.

Kind of like Sony did, Palm rested on its laurels, assuming that its well-known brand name would carry it through. Through 2009 it was still using a version of the same old PalmOS that had been around for ten years, while other companies were coming up with newer operating systems without the old PalmOS’s limitations.

Palm simply waited too late to get started—and did a poor job capitalizing on its new devices.

The Future of Palm

As for what the future holds for Palm, it may not be entirely bleak. According to the Bloomberg article:

“Palm still has quite a good brand in the U.S. market, and some strong technology, so you can do something with it,” said Frank He, a technology analyst at BOC International Holdings Ltd. in Hong Kong. “The shares have gone down a lot and the company may become attractive to anyone looking for a turnaround play.”

HTC and Lenovo have reportedly expressed an interest. Dell reportedly considered Palm but decided against making an offer. HTC might be particularly interested in Palm given that Palm’s patent portfolio might well be helpful in the HTC/Apple patent lawsuit currently underway. Some Chinese phone manufacturers may be interested as well.

PC World has an article suggesting a few buyers who might have a good use for Palm’s assets, too.

Whatever happens, Palm’s new owners will have their work cut out for them if they want Palm devices to be competitive in the marketplace again.

 
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