Palm Might Be Coming Back! – A Brief History Of The Iconic Brand

AlexandraPalm Pilot 1000

We have heard several rumours that Palm might be coming back with a new device in 2015. Palm, as on of the original groundbreaking companies in the PDA market of the late 1990s, has some romance to its name. It brought touchscreen computing via a stylus to the public and sold over 30 million units in the company’s first decade of operation. Palm, however made several mistakes and failed to capture the magic once again in the competitive smartphone market. What happened, and what does the future have for Palm?

The Golden Years

Palm Computing was founded in 1992 by Jeff Hawkins, Donna Dubinsky and Ed Colligan. The original purpose of the company was to create software for the Zoomer devices sold by Casio. They, however, strongly believed that they could create better hardware than what was available on the market at the time. Eventually, in 1996, they developed their first personal assistant device, or PDA, the Pilot 1000. The Pilot could fit in your pocket and became the world’s first successful PDA. The device debuted with a monochrome black-on-green glass touch screen display and an internal 128 kb memory. It included applications like Date Book, Address Book, To Do List, Memo Pad and a calculator. Through the revolutionary HotSync software, the Pilot could sync with either a Windows or a Macintosh desktop computer. It was the perfect complement to a personal computer and paved they way for the smartphone.

3Com acquired Palm in 1997, but, frustrated because they felt they had insufficient control over the development of the Palm devices, the founders left 3Com to start another company, Handspring. Handspring went on to produce the Handspring Visor, a clone of the Palm PDA’s that ran on the Palm OS. Doing so, Handspring became the first direct competitor to have licensed the PalmOS. With the Handspring Treo, the founders, finally created in 2003 the first smartphone that ran the PalmOS. It went on to become one of the signature devices of the age. By the beginning of 2000, Palm was widely predicted to become the next Microsoft. In March of that year, 3Com spun off Palm into an independent company and the IPO was a blockbuster.

What Went Wrong?

However, in 2001, the tech stock bubble had burst and Palm’s IPO stock opening price would never be reached again. Meanwhile, the competition in the PDA market was heating up quickly. Back then, everyone believed that in order to win in the mobile market, you had to follow Microsoft footsteps and license the operating system to as many companies as possible. Eager to pursue Microsoft’s model, Palm began to license its OS to many manufacturers. Initially, Palm was very successful doing this with Handspring, Sony, Samsung, Garmin, Kyocera, Acer and more signing up to run PalmOS on PDA’s and smartphones. To succeed as a licensing company, Palm split its operations into 2 companies in 2002, PalmOne, for the hardware and PalmSource handling the PalmOs. But, in the end, it proved that splitting Palm into two companies turned out to be a big mistake. With the competition in the smartphone market getting even more fierce, Handspring could no longer survive as in independent company. They merged again with PalmOne in 2003.

PalmSource had been struggling to reinvent the PalmOs since the spin-off. PalmSource rebranded the classic PalmOs as Cobalt, but for existing licensees, this meant an immense amount of work to migrate. There was no clear and easy upgrade path, and there were no compelling end user features. No one wanted the new OS and most of the licensees, including Sony, had moved away. PalmSource became a company with an operating system that nobody wanted. This quickly put PalmSource up for sale. Motorola made a bid, but ultimately Japanese mobile browser maker Access Systems bought PalmSource. With no more PalmOs system, Palm launched its first smartphone powered with Windows Mobile, the Treo 700W in 2006. Now, Palm had become a hardware company without an OS of its own. Its devices were running on an antiquated OS without a future and relying on Windows Mobile left Palm with an untrustworthy partner and little ability to differentiate itself. The company firmly needed a savior.

Can Palm Be Saved?

A private equity firm, Elevation Partners, bought a 25% stake in the company for $325 million and brought on Jon Rubinstein (he previously ran Apple’s iPod division) to restructure the company as the new CEO. Rubenstein cut back costs dramatically by cutting multiple long running projects and at the CES 2009, Palm blew everyone away with their new WebOS platform and Pre smartphone. WebOS emerged as the first credible competitor to Apple’s iOS by providing advanced multitasking and notification management that even made the iPhone look old and bulky. However, Palm did not have the scale to push the Pre fast enough and at the same time, Android powered devices landed, leaving the Pre struggling in a crowded market. In 2010, Palm went up for sale again. This time, the bidding war was won by HP, who bought Palm for $1,2 billion. HP promised to keep the company and the WebOS platform alive. In 2011, HP unveiled its plans for a WebOS powered HP touchpad tablet and smartphones, but the Palm name quietly died.

 

However, nearly 5 years after Palm was sold to HP, we might hear back from them. HP sold the rights to the Palm name and trademark to Alcatel One Touch, back in October. Alcatel One Touch is a smartphone brand owned by a Chinese company. The company does not have a large presence in North America, probably believing that doing business under a known US brand might make entering the market easier.