Palm: Just where do you think you're going?

by David Sims


After downgrading expectations for the quarter and backing away from its plan to buy wireless middleware service provider Extended Systems, Palm CEO Carl Yankowski "refused to outline the alternatives Palm is considering."



Sorry, Carl, that's just not good enough. The announcement made many of us realize that Palm is no longer just another hardware company. Through the licensing of its software, it has become a lynchpin for a whole sector, and whether you're packing a slim Palm V or a wireless VIIx, or a Handspring that you use to shoot pictures, or a Symbol machine that you read bar codes from, or even a Kyocera or Samsung phone that doubles as your PDA, you have a vested interest in Palm's future.



Yankowski's refusal to speculate hasn't stopped others from trying to read the tea leaves. Ian Fried of Cnet's News.com reports that Palm has seen its heaviest losses on the hardware side, and points out several options, including scrapping its Palm.net service, which feeds web clippings to the Palm VIIs out there, or putting itself up for sale. Apple Computer was making overtures to Palm in 1999, but since then Handspring seems to have grown closer to Apple, showing a huge presence at last January's MacWorld show and being the first to ship Mac-ready handhelds. (Palm has recently caught up on this, shipping a Mac and Windows CD with its 505 model.)



But any confusion around the future of the Palm operating system will open an opportunity for Microsoft's Pocket PC operating system and the devices that run it, especially the Compaq iPAQ. Compaq recently introduced a lower end model, the monochrome-screen H3135, priced at $399. While that's near the upper end of the price range for Palms, it's quite a bit less than the $599 for the color-screen iPAQs.



Those of us who rely on the Palm operating system -- and there are far more of us than just those who own Palms -- hope that Mr. Yankowski can come up with alternatives soon. We are too far down this path to become something like the community of users who still watch for the resurrection of Amiga or Newton.





Palm is struggling for a strategy that will supplement its revenues from licensing the OS. It has backed away from its planned merger with Extended Systems, which would have brought it into the middleware and corporate services businesses. Should it back out of the hardware market and focus on developing systems that span the range from simple personal information managers (PIMs) to multimedia handhelds that would compete with Pocket PCs? Is there enough revenue in the operating system business to sustain them? Will they drive a steam roller over their surplus Palms, or give them to schools? Let us know what you think.