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Palms announcement that it will acquire Handspring, one of Palm OSs earliest licensees and maker of the Treo communicator, will bolster the goals of both Palm and Handspring, although it will eliminate a major PalmSource licensee.
The short analysis as to why Handspring sold is simple. Handset development is expensive and, while public, the company had limited resources in this poor economic climate. Handsprings strategy to work closely with specific carriers was an attempt to work around its scale limitations, but ultimately the goal for any handset developer is to work with as many carriers as possible. Palm has the brand and the capital to compete more effectively (although the hardware group is slated to be renamed later this year).
Up until now, however, Palm was fumbling in its wireless efforts. Its sole voice-enabled handset, the Tungsten W, required an earbud to communicate via voice. Palm seemed to resist a more natural voice interface as if it had a corporate allergy to wireless success.
For highly specialized devices, such as conceivably Nokias N-Gage, there are form factor and functionality constraints that could favor forsaking voice entirely, but particularly in this age of voice-centricity and Bluetooth dearth, voice is virtually a requirement for carrier distribution. Handspring got it. Deal with the screen smudges and let people use phones the way theyve been doing for over a century.
Well likely see more toning down of the Handspring rhetoric that the market for standalone devices is dead. Indeed, such claims were not so much an exaggeration as they were an indictment of the poor connectivity of most standalone handhelds today. There will eventually be a market for two-device solutions. However, as the growing sophistication from handsets based on Microsofts Smartphone design and Symbian show, competition is heating up in the feature-rich category. In whats yet another sign of whats wrong with Bluetooth, most of the phones that do Bluetooth best are the ones that have the least need to leverage a handheld.
Another great benefit to Palm should be the return of Jeff Hawkins, the companys founder and ideological shaman. His joining Palm may not signal a renaissance as profound as Steve Jobs return to Apple, but his vision can only help a company that had been losing its way badly prior to its latest releases.
For PalmSource, which has taken yet another step closer to independence, the news is definitely bad in the short term. After losing one licensee earlier this year in HandEra, it now loses an early adopter. However, the news could be positive long-term. Palm and Handspring combined have relationships with three U.S. carriers. Volume drives PalmSources revenue, and if a reinvigorated Palm can break into broader carrier distribution with future Treos, the endgame could be a win for the emerging software company.
Does Palm deserve a hand for handling Handspring or is this just a handout? E-mail me.
Wireless Supersite Editor Ross Rubin is a senior analyst at eMarketer. He has researched wireless communications since 1994 and has been covering technology since 1989.
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