Palm is hoping that lightning will strike twice with its acquisition of Handspring, but the reunion may not be an easy one.
Reading the Deal: Palm and Handspring (InternetNews.com)
Handspring's Next Treo Spotted (Forbes)
Reading the Deal: Palm and Handspring
Analysts say that the Palm-Handspring deal shows that the two companies needed each others know-how to stay active in the ever changing mobile market. Palm consistently retains its number one sales spot in the world for PDAs, but the latest stats from research firm IDC suggest Palms global sales are nearly double the number of handhelds compared to its closest competitor, Hewlett-Packard, which makes the iPAQ. Handspring, on the other hand, had a technologically advanced product but was suffering from sluggish sales and a possible delisting from the Nasdaq. The two companies have actually been working together to shore up their assets. Back in August 2002, a U.S. District Court in Delaware cleared the two handheld makers of accusations by NCR Corp. of violating two patents relating to data entry and synchronization on handheld devices. Both Handspring and Palm have also settled their spat with BlackBerry maker Research In Motion by licensing its QWERTY keyboard technology.
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InternetNews.comPalm Grasps Handsprings Importance
Both Palm and Handspring have recently fallen on hard times and risked becoming also-rans in a market now crowded with the likes of Sony, Samsung, Hewlett-Packard, and Dell. The pairing, currently valued at about $170 million, is aimed at shoring up the Palm hardware groups precarious position against an onslaught of rivals. Palm had been working on its own smartphone, but Handspring is just weeks away from rolling out its second-generation Treo communicator. Handspring has already spent two years building key relationships with Sprint and other wireless carriers, whereas Palm would have been a newcomer to the notoriously difficult communications market. Certainly, the combination will shore up the balance sheet. Palm Chief Financial Officer Judy Bruner says the company can save $25 million annually, in part through layoffs and consolidated procurement of parts, after the deal closes later this year.
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BusinessWeekHandsprings Next Treo SpottedOne of Palms prizes for its $169 million in stock is getting back its co-founder and design guru Jeffrey Hawkins, who left Palm in 1998 while it was still a unit of 3Com to start Handspring. Hawkins will be chief technology officer at Palm. Its other big prize is a device that Handspring has been working on, which sources say will be called the Treo 600. Some rumors suggest it may have an integrated digital camera on the back, which would have it following the latest fad for mobile phones and PDAs. It should also run Palm OS 5, the latest version of the Palm operating system, while to date the Treo line has run on various flavors of OS 4.Read the full story on: ForbesPalm, Handspring Merger Makes for Strong Market Leader
Following Palm and Handsprings announcement of their plans to merge later this year, its clear that the PDA space has a new, stronger market leader. The deal reunites the pioneers of hand-held technology that had splintered five years ago in a bitter rivalry. Not so clear, however, is how the merger will affect marketing efforts. The Handspring brand is likely to be retired after the merger, leaving the merged company with three sub-brands: Zire, Tungsten and Treo. Zire is the PDA brand for budget-conscious consumers; Tungsten for enterprise customers and early adopters. Meanwhile, Treo will be intended, as under Handspring, for cellular providers to resell to their customers. Read the full story on: Technology MarketingPalm Deal Harks Back, Looks Forward
Palm is hoping that lightning will strike twice with its acquisition of Handspring, but the reunion may not be an easy one. After an initial rise to the stratosphere, both companies have found themselves with heavy losses and dwindling cash in markets that have not lived up to expectations. For a time, both companies flourished. But in early 2001, a series of manufacturing glitches and other missteps led to a glut of Palm products just as the economy worsened. Handspring, hit by the fallout from Palms mistakes, decided to conserve resources and abandoned the traditional organizer market to focus on its hybrid Treo. Both Palm and Handspring cut staff, scrapped plans for fancy new headquarters and struggled to regroup. Palm has announced plans to split its hardware and operating systems units, a move it hopes to complete prior to closing the Handspring deal.
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