The decline and fall of the Palm empire

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

Reason for hope

Despite my doom-and-gloom scenario, there is reason to hope that Hawkins may save the company yet again.

Rumors suggest that Jeff Hawkins is toiling away in some secret lab to build a revolutionary device that will leapfrog Palm ahead of the pack. If the rumors are true, Palm has a chance to survive. If false, Palm is probably toast.

The $64,000 question is: Has Palm lost its mojo? In other words, does Palm still think like Apple -- that the product is everything -- or is the company thinking more like HP, where partnerships, branding shell games and big enterprise deals are most important?

HP fails in the smartphone market in part because of an institutionalized delusion, common at most big and old Silicon Valley companies, that enterprises buy smartphones based on security, back-end infrastructure support and integration with enterprise systems in general.

Yes, those things are important. But in the smartphone market, cool is king, even at the biggest companies. RIM does a great job supporting business goals. But RIM is number one because people "love" their BlackBerrys. Palm is number two (but dropping fast) because people "love" (or used to love) their Treos.

A gadget that elicits an emotional response from buyers can emerge only from visionary design, and cannot be produced with a design-by-committee corporate culture.

Palm has plenty of cash and reasonable prospects for growth. My advice is to throw every penny at Hawkins and let him build the device of his dreams without interference. Everything the company now has started with Hawkins' design vision.

Given its history, however, I think it's likely that Palm will squander Hawkins' genius yet again with another disastrous stunt, such as selling the company.

The software business, PalmSource, sold out to Japan's Access Systems in a US$324 million deal. The company changed the name of the operating system to the Garnet OS. That product is now headed for obscurity and irrelevance.

Will Palm follow PalmSource down the road to oblivion? We'll see.

If the company can remain true to its founding vision, remain independent and out-innovate everyone else like it used to, you can disregard everything I've written here. But if Palm remains on its current trajectory, the company is history.

Mike Elgan is a technology writer and former editor of Windows Magazine. He can be reached at mike.elgan@elgan.com or his blog: http://therawfeed.com.

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