By the way, who headed this Palm invasion? Dubinsky’s CEO chair was taken by Janis Roberts, then by Robin Adams. He was followed by Alan Kessler who came from 3Com and then – Carl Yankowski.

Carl Yankowski

He headed the company just before it went public, in December 1999. He came from outside – having served as president of Sony Electronics and CEO of Reebok Unlimited. He probably was a good tactic as he managed to retain and enrich Hawkins’ heritage, but proved to be a less successful strategist. He somehow failed such goals as the development of wireless products, invasion into the corporate market, and improvement of the operating system. By the way, Microsoft caught the moment and in the same year 2000 released the new version of its OS – WinCE 3.0.

So, that was the end of the Palm’s golden age. There will be a lot of interesting events in the future, but they will be different. We will watch the leaders – Palm and Handspring – slowly rolling downhill. Still, with a few gleams of sunlight.

Part III

So, Palm stepped into the Happy New Year 2001 as quite another company – without its founding fathers (and a mother), but with a new CEO, Carl Yankowski. It was an independent company, separated from 3Com, although the latter still owned the control stock. And this new company faced new problems.

The most urgent one was, of course, the fierce market competition. We shouldn’t forget that in the beginning of this year Hawkins and Dubinsky founded Handspring, which showed fine development dynamics. They were winning the PDA market, ousting the leader, Palm, little by little. On the other side, Microsoft was advancing with its Pocket PC operating system and third-party PDAs running it.

The year 2001 was hard on the computer industry at large and is now remembered for its global market recession with very low demand (although the PDA market suffered less than the PC one). Together with harder competition, this produced obvious results: at the beginning of the year, Pocket PC and Handspring advanced wielding the weapon of price-cutting, while Palm retreated, reacting in the same manner.

Here are the numbers: Handspring approached the year 2000 with sales volumes of $16 million per quarter, and the year 2001 with $115 million per quarter. However, this didn’t save the company from losses, which grew to $7 million in the last quarter of 2000. Of course, the volumes were incomparable: Palm cost $12 billion then (remember $53 billion on the initial public offering day?) against Handspring’s $3.6 billion. The sales volumes differed even more: Palm’s 1.5 billion in 2000 against Handspring’s 270 million. As for the Pocket PC platform, it is hard to cite any numbers as there are much more players in this field. But if Palm’s share of the PDA market was estimated to 60% then and Handspring’s – to 28%, Pocket PC had about 10% (considering the existence of other platforms, too).