Palm puts aside feuds in quest for former glory
From its high point as one of the most innovative hardware developers of the mid-90s, Palm entered the new decade riven by internal strife and condemned by its partners and users for a lack of vision.
But Todd Bradley, president and chief executive of Palm Solutions Group, believes huge changes in the company - including the acquisition of Handspring and the spin-off of the PalmSource software business - will see Palm return to its former glory.
Mr Bradley spent three years as executive vice-president of global operations at Gateway Computer before joining Palm as chief operating officer in June 2001.
During his first year with Palm, he turned around a company mired in slowing sales, bungling product transition and a glut of inventory.
'Fast, aggressive action was required to take Palm out of that situation. Most people who were with the company at that time have already left,' he said last week in Singapore, where he was launching a trio of new handheld devices.
Mr Bradley was promoted to president of Palm's hardware unit last May before taking the helm as chief executive officer four months later.
His promotion came at a critical time for Palm. The handhelds maker again faced slowing sales and was looking to avoid a repeat of 2001's business woes.
A sluggish economy played a part, but the company was also criticised for being slower to innovate than rivals which licensed the Palm operating system.
The challenges Mr Bradley now faces are similar to those faced in previous years.
Although his company reported improved revenue and a lower-than-expected loss for the quarter ended in August, it will take more than will to revive global handheld shipments, which have been shrinking steadily.
Worldwide shipments of handhelds in the second quarter were down 10.7 per cent to 2.27 million units year on year, according to research firm International Data Corp.
Analysts attribute the steady decline to a lack of innovation.
But Mr Bradley disagrees.
'From a Palm perspective, we are innovating more than ever. The amount of sophistication we put in to our recent products - and we're still lowering prices - is pretty significant in a challenging economic climate,' he said.
Last Wednesday, the company launched the Tungsten T3 and E and the Zire 21, a replacement for Palm's low-budget hit from last year, the original Zire.
The Zire 21 has eight megabytes of memory and runs on Palm OS 5.21.
The Tungsten E will replace the old m130 as the company's cheapest colour handheld, while the T3 introduces the brand's biggest screen to date, thanks to its 320x480 stretch display.
Mr Bradley is confident the line-up will spur demand.
'We've begun to see early signs of that,' he said.
More important, however, is Palm's belated interest in smartphones.
The company is in the throes of acquiring smartphone maker Handspring, bringing back the visionaries who left Palm after a dispute over the company's future five years ago.
Jeff Hawkins, father of the original Palm Pilot, will return as technology chief, while Handspring chief Donna Dubinsky, Palm's first chief executive a decade ago, will also return, albeit to a less visible role on Palm's board.
'I spend a lot of time with Jeff and the Handspring team,' said Mr Bradley, adding that he had 'every confidence that Jeff will be challenging, stimulating and bringing PalmOne to the next level'.
The buyout is expected to be completed by year end and the company will be called PalmOne.
The new Treo 600 will add to its line of Tungsten and Zire handhelds. At the same time, Palm's operating system arm will be spun off as PalmSource.
'The Treo product line will allow us to take advantage of a market that's growing very rapidly and has a low user base at the moment,' said Mr Bradley.
On whether past disagreements between Ms Dubinsky and Palm chairman Eric Benhamou will affect PalmOne's future, Mr Bradley said: 'That's history. We spend no time on that.
'We have enough challenges that require our attention, such as beating Hewlett-Packard and other competitors.'