Investor's Business Daily
Handspring's Hawkins Eyes Next Big Thing

http://biz.yahoo.com/ibd/031027/tech01_1.html

He's already working on the follow-up to Handspring's Treo 600, which debuted this month to rave reviews. The Treo 600, a combination cell phone and personal digital assistant in a candy bar-sized device, aims to become the first successful smart phone.

Hawkins won't say much about his new project, but says it will require the combined resources of Palm and Handspring to pull off.

Some industry watchers speculate that Hawkins might leave after the merger to devote full attention to his other passion: brain research. Hawkins is founder and executive director of the nonprofit Redwood Neuroscience Institute, which works on theories and mathematical models of brain function.

But Hawkins says he still has things he wants to do in mobile computing.

If approved by shareholders on Tuesday, Palm and Handspring will merge to create a new hardware company called PalmOne Inc. Right before the merger, Palm will spin off its operating system unit to its shareholders as a separate public company called PalmSource Inc. Hawkins, who co-founded Palm and Handspring, will serve as chief technology officer for PalmOne.

Hawkins spoke with IBD recently about his career, the handheld industry and its future.

IBD: To what do you attribute your success?

Hawkins: Many years ago - 17 years ago or something like that - I got the bug in my head that the future of personal computing was going to be mobile devices, mobile computing. I looked at the world of PCs and said, "This ain't gonna work for a world of 6 billion people." Well, back then it was 5 billion. These products (PCs) are too complex and they're too hard to use and too expensive, and computing ought to be for everybody.

When I think about this stuff, I say, "What can I do to help accelerate that trend or change?" To go from what I consider the generation of the personal computer, which is very technologically driven and complex and difficult to use, toward one that is more amenable to the world's populous.

Along the way, there are different things we can work on, but it's always having that vision. Everyone working with me knows this. We all talk about it all the time. And it actually makes a huge difference in what you do and how you do it.

I'm convinced that everyone in the world is going to have a (cell) phone and they all should be smart phones. Everyone should have a little e-mail, Web browser and access to information anywhere in the world.

IBD: How close is the Treo 600 to your mobile computing vision?

Hawkins: The Treo 600, in my mind, is a significant product. I don't know how many we're going to sell. But I think it's a significant product. It moves us more toward the direction where everybody's cell phone ought to be a smart machine. It shouldn't be this dumb little thing where all you can do is make phone calls on it.

And one of these days these things will be $99. They're not today, but they'll be here in a few years. (The Treo 600 sells for $600, but can be obtained for less with a service plan with a cell phone company.)

IBD: What are your expectations for the Treo 600?

Hawkins: No one has had real success in the smart phone space. We hope we'll be one of the first companies that breaks out and gets the formula right, just like we were the first people who got the handheld computer right.

IBD: You've competed with Microsoft and Hewlett-Packard in handhelds, but now you're facing a new set of rivals in cell phone makers Nokia, Samsung, Motorola and others. How will you fare?

Hawkins: There are some things that we can do to compete against these guys in the smart phone space. But already, and this is going to be a big tease, I have the unbelievable next big thing in mind that I want to work on.

One of the reasons I wanted to merge Handspring with Palm was because of this idea. And it's something that was bigger than just Handspring could do on its own. I felt that the combined companies were perfectly aligned to do this new thing.

IBD: When will this mystery product be available?

Hawkins: It's not coming out soon. All products take a minimum of a year to build, but most take 15 months.

IBD: Any hints on this product?

Hawkins: If you're thinking about the big prize (and) the future of personal computing and you don't think of yourself as a handheld computing company or a smart phone company, but you say, "What impact can I make in the future of personal computing? And it's mobile," (then you're on the right path). Those are my two intersection points: future of personal computing and mobile.

(It) may yet again be sort of a different industry or different business, but plays on our strengths in the things we've been building over the years.

I have some things to work on that are totally new, which Nokia would never do and Compaq and Microsoft would probably never think of.

IBD: Do you envision people trading in their cell phones en masse for smart phones soon?

Hawkins: Most people's phones today are used just for voice calls. That's it. That's 95% to 99% of the usage. If you look at the Treo, it's a great voice phone, it's a great organizer - it has my address book, my calendar and it's all synched up automatically. It is a great wireless e-mail terminal. It's a great small Web browser. It's a great (instant) messaging device. And it's got a persistent Internet connection. Those features are universal needs.

Is it possible in the future that phones will not have those capabilities? I don't think so. There is no reason if I can make it small enough and cheap enough that every phone wouldn't have that. Because everyone would benefit.

The question is how much are you going to pay for it and how soon are you going to know you need it and what compromises are you willing to put up with?

But it's inevitable that these capabilities will eventually sweep everybody's cell phones.

And everyone will upgrade. And when it happens, it's going to happen rapidly. It's not going to happen over a 20-year period. It's going to happen over a few-year period. It's going to happen when someone gets the perfect product or a good enough product or the one that brings you over the hump. It might take five years from now, but it's going to happen. No doubt about it. And that's why we keep plugging away at this.