At the same time, they named the CEO of the hardware division – Todd Bradley, who de-facto already headed it. He immediately faced new problems as the company reported a quarterly loss of $27 million. It was natural as there was no surplus stock at hand. The market reacted with a further stock rate slump. Standard & Poor even excluded Palm from its S&P 500 index.

Well, this was not at all surprising as the PDA sales volumes were still going down. For example, in that quarter they subsided by 18.9%, or down to 1.3 million units. As a result, Palm’s market share became the lowest ever – 42.1%, shrinking by a third throughout the quarter. It was hard to do anything about it, since everybody were in a difficult situation then. Anyway, the curative measures were evident: Palm announced its plans to release in that fall a device for sub-$100 price range, thus trying to trail though the very bottom of the market. It was also active in the corporate sector: signing deals with BMW and medical consulting grand, McKesson…

By the way, Handspring was trying to do about the same thing. Having lost about a half of what they had, the company signed deals with several seller-firms about the Treo promotion. The companies were MarketLink, the government sector-oriented CDW-G, and Global Wireless Data working with cell operators. Handspring also approached one more cell monster, AT&T, and announced the new device, Treo 300, which was an CDMA-version of the Treo 270 intended for the Sprint network.

This is where the good news ends. As for problems,… The company had to stop shipping the Treo 90 and Treo 270 because of defective LCD displays they had. It was a serious blow considering the depressing market situation. As a result, they only sold 170 thousand units in the quarter, which was already good enough for that situation. New staff layoffs followed. Handspring fired 20% of the employees and offered to sublet the offices it had rented before for expansion.

By the way, that was time for Ed Colligan to accept congratulations (or condolences?) for his appointment as Handspring’s president, besides retaining the COO post. He took the chair of Donna Dubinsky, who remained the company’s CEO, though. A funny reshuffle among the three founding fathers in the midst of the crisis, Donna had been actually most responsible for.

Well, PalmSource changed its team, too. They found a CFO, Albert Wood, and enlarged the board of directors by including John Shoven, a professor from Stanford University. The division was doing well. Kyocera and Samsung renewed their PalmOS licenses, Sony Ericsson agreed to collaborate in the Bluetooth field to provide compatibility between PDAs and phones of the two companies. Sony even bought 6% of PalmSource’s stock for $20 million, thus showing its determination to support the Palm platform, and voiced its intention to help in the development of future PalmOS versions.