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  1.    #1  
    From PDABuzz

    Many in the handheld industry are still reeling after Palm's announcement yesterday of far worse than expected revenues and the cancellation of their planned Extended Systems acquisition. .... CEO Carl Yankowski said that their plans may include a "more or less dramatically changing our business model". A few of Palm's options include .... exiting the hardware market all together....
    Scary thought but....

    Palm may be a more powerful force for good in this industry if it did drop the headache of making hardware and focus on the OS. Why bother with hardware? As handhelds become more and more of a commodity instead of a specialty item, the profits margins WILL shrink.

    Many of us that post to this board have slammed the m-series as being middle of the road and uninspired. Exciting hardware requires people at the vanguard like Hawkins@Handspring, or companies that are tuned into particular sectors, like Handera, or Sony. Each of these companies are making products that have a certain "sex appeal" to their target audience. I can't say the same for the m-series.

    The PC example

    In the 80s, the PC was a boutique item that commanded high profit margins. As more people used them, and more manufacturers entered the market, the PC became more and more of a commodity. Today margins on PCs are razor thin. I personally would rather sell loaves of bread.

    Be Like Billy

    For better or for worse, would Microsoft be the 8,000-pound Raptor it is today if they tried to dominate the PC AND the OS that runs them? The lesson the PC industry has taught us is that a box is a box is a box. The power lies not with the box, but inside the box. The power lies with the OS.

    If Yankoff, I mean Yankowski is contemplating this move, he should jump now while Palm still has a say in its own destiny.
    "That IS a Palm III form-factor in my pocket, AND I'm happy to see you...."
  2. #2  
    I'd answer this myself if foo fighter hadn't stolen my thunder in another thread:

    95% of Palm's revenue comes from hardware sales. Palm simply can't survive on the low margins it generates from licensing. They only make $7.50 from Handspring alone. Can they survive on those numbers, let alone grow? This is why I always shake my head at people who continue to believe that Palm is (or will be) the Microsoft of mobile devices. Nope, it aint gonna happen! Microsoft has always been a software developer that built its business model on selling software. Palm was a hardware developer that must somehow find a way to shift to selling software. It didn't work for Apple, and I don't see how it will work for Palm, especially given the incredibly razor thin margins on mobile software. It's easy for MS to make tons of money of $90 Windows upgrade sales and $250 Office bundles, but an entirely different scenario where a company sells its OS for $7.50. And, let's face it, PDAs still have not reached the broad scope of acceptance that cell phones have established. The only way Palm could ever truly switch to being an OS company, and become highly profitable in the process, the PDA market would have to grow from a several million unit industry (which it is now)...to a several hundred million unit industry. That may yet happen, but that's not going to save Palm from the hot seat right now.
    Couldn't have said it better.
  3.    #3  
    You guys are making my point for me. In 2 - 5 years, devices that use Palm OS or PPC WILL number in the hundreds of millions. They will all be color, hi-res, super fast, blah, blah, blah. These devices will be a commodity. Do you care what brand of spiral-bound notebook you buy from the store, or pull from the office supply cabinet?

    There's a reason that Microsoft hasn't jumped into PPC hardware while the sector is in its infancy. Although with billions in cash, they could have. Some may call Bill Gates the devil, but the devil's no fool....
    "That IS a Palm III form-factor in my pocket, AND I'm happy to see you...."
  4. #4  
    Amen to that!
    <CENTER>
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    <span style="color: blue;">Where's the "Make Coffee" button again?</span>
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  5. #5  
    It seems people are just focusing on the Os side of things. What about software? Microsoft is not only producing OS for PCs, but it produce a a wide variety of software for the platform. I don't see why Palm can't do the same. There is money to be had in Palm OS software. Just take a look at how much quaility software such as Pocket Quicken 2, Ultrasoft Money and Word Smith is selling.

    Also, there is no reason why Palm cannot get into the services business. They already have a toehold in this area with their WeSync and MyPalm service.
  6. #6  
    I second that and Palm already does a good job with Enterprise solutions which is where they really want to focus for the repeat sale.

    Perhaps, they will sell of the hardware to IBM and then history will repeat itself?

    Just a thought.
    Moose Man
    Welcome my son, welcome to the machine.
    iPhone 3G, Treo 750, 680, 650, 600 and T5, T3, T, M515, M505, Vx, V, Prizm, Visor, IIIc, IIIe, Palm Pilot Professional, Palm Pilot (ok boys and girls a whopping 128k of memory - those were the days) and former Palm Beta tester.
  7.    #7  
    Originally posted by yardie
    It seems people are just focusing on the Os side of things. What about software? Microsoft is not only producing OS for PCs, but it produce a a wide variety of software for the platform. I don't see why Palm can't do the same. There is money to be had in Palm OS software. Just take a look at how much quaility software such as Pocket Quicken 2, Ultrasoft Money and Word Smith is selling.

    Also, there is no reason why Palm cannot get into the services business. They already have a toehold in this area with their WeSync and MyPalm service.
    I agree yardie. OS, software, other value-added services. And leave the headaches of hardware to companies that are inspired to innovate and differentiate their products.
    Last edited by Slot_Machine; 05/20/2001 at 07:19 PM.
    "That IS a Palm III form-factor in my pocket, AND I'm happy to see you...."
  8. #8  
    If you really think Palm is not innovative enough in their hardware, then what makes you believe they can be innovative in creating software and OS's? The OS and hardware are intimately tied together, after all. Aside from all the m500-series complaints, there are a bunch of other complaints about Palm taking Sony's memory stick OS extensions and HS's 16-bit color extensions and incorporating them into OS4.0. And aside from the prehistoric Datebook/Expense programs, the software included with the m505 is written by other companies.

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