The decline and fall of the Palm empire

If Palm remains on its current trajectory, the company is history

See the trend?

Palm merges with another company only later to be spun off. The company ignores the founders' direction, only to later acquire their startup and take up their direction. Palm spins out the software division only later to buy back the rights to it. Palm gives up the Palm trademark only to later buy it back.

How many times has Palm distracted, divided and plundered the company with spinoffs, acquisitions and mismanagement?

Palm's official timeline provides another view of what went wrong.

From 1995 to 2000, many of the timeline milestones use the word "revolution" and feature multiple design awards for innovation. The company was an unstoppable, invention-crazy company focused like a laser beam on product greatness.

The news in 2000 was all about the rapid growth in developers, from 31,000 early in the year to more than 100,000 by September.

After that, the "milestones" are bland corporate blather about partnerships, new markets and boring new product launches. The "revolutions" and design awards moved from Palm's history page to those of other companies.

It's an oversimplification, but as control over Palm was transferred from the visionaries to the suits, the products became more generic and uninspired.

Which was OK -- for a while.

Why Palm is doomed

Unless Palm finds its way, it may slouch into obscurity or cease to exist altogether in the coming years.

Currently, Palm is a profitable company with lots of customers, partners and investors. The company seems to be doing OK, and Wall Street isn't worried. Blackjack.

The problem is that the world has changed radically in just the past year. It's hard to believe, but it was only a year ago that the smartphone purchasing decision was as easy as paper or plastic -- BlackBerry or Treo?

But as more players jump into the smartphone handset market, margins shrink and user expectations rise. And everyone seems to be innovating except for the great innovator -- Palm.

During the past year, all the major players launched "Treo Killer" devices, including Reseatch in Motion with both its BlackBerry Pearl and the Pearl's full-keyboard cousin, the BlackBerry 8800. Samsung's goes directly after the Treo market. The Motorola Q is hot. Nokia, Hewlett-Packard, Sony, Samsung and others are all gunning for Treo with brand-new, full-featured smartphone gadgets.

And then, last month, iPhone changed everything. Jobs' Macworld keynote was like a nuclear bomb in the world of smartphone enthusiasts. The "key influencers" who gave Treos visibility and cachet a year ago -- Hollywood types, gadget freaks and absolutely everyone who's anyone in Silicon Valley -- have stopped talking about Treos and are simply waiting for the iPhone to come out, at which time they will unceremonially dump their Treos and embrace the new innovation leader.

Meanwhile, it looks like Palm isn't even trying to innovate. Colligan said in an interview recently that the company is focused on ease of use, rather than design, and that the company doesn't want to "follow design fads." In other words, Palm is not only failing to set trends, it's not even following them anymore.

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