That’s why there was nothing to get hopeful about. Throughout the rest of the year the companies went on laying off staff, dropping prices, trying to stimulate the decreasing sales and raising capital (quite successfully, though) to live on. It was an Armageddon, really, with money flushing away in tens of millions per quarter. Among new products, I can only recall a quite successful mainstream m125 model (with an SD slot) from Palm and successfully forgotten Visor Neo and Visor Pro that aspired for the same market sector. Handspring announced the Treo family and that was quite another story. They were communicators combining PDAs capabilities, Internet access and voice communication as a regular cell phone. However, although these were announced, they had never been released, so they couldn’t change anything for Handspring.

This way, tired and beaten, both companies dragged to the end of this murdering year. Still, Hawkins and Dubinsky were better off. As for Palm… As I have said above, the company started the year with a doubled sales volume compared to the same quarter of the previous year. The company ended this year with sales volumes 44% lower than previous year and amounting to $290 million only, as if there had been no last two years. The quarter was again unprofitable: they lost $25 million.

Reporting the quarterly results, the company’s chairman of board of directors, Eric Benhamou, admitted the management mistakes made during the past year and promised a change of the situation. About 70% of the company’s managers were to be new people. Carl Yankowski was fired first. He ruled the company into the open market, but didn’t cope with the problems of it.

Of course, Yankowski’s leaving couldn’t do miracles to Palm. Moreover, it was clear that the bad times hadn’t yet ended. At least, the story with the long-promised, but never implemented Bluetooth, continued. The only thing Palm could do was issuing a new Bluetooth SDK for software developers.

As a culmination, Palm’s market share was going ever lower. During the year 2001, its presence in the USA market diminished from 71% to 58%, which was only slightly compensated by the growth of Handspring’s (from 14% to 15%) and Sony’s share (from below 1% to 6%). Thus, the Palm camp was more or less competitive against the common enemy – Pocket PC had 26% against their total 73%. On the other hand, Pocket PC devices only amounted to 15% of the market in 2000.

The Palm camp tried to strike back, more or less successfully. The importance of wireless communication was beyond doubt. That was where they moved to. In the January of 2002, Palm at last released its second device with wireless capabilities – i705 (they had earlier promised to launch it in 2001). The device was something like the m505 with a radio unit that could connect to the Palm.net service for fetching e-mail and doing other things.

Table of contents: Part I     Donna Dubinsky     Ed Colligan Part II Part III