PalmSource didn’t sleep, either. It was busy making new licensees. They have already made about fifteen (twice less than Microsoft had for its Pocket PC), and the list of licensees included such monsters as the Chinese Legend. The Chinese market was a dainty bit, never yet tasted by Palm. By the way, Palm also started direct sales there. There were losses, too. HandEra, one of the first Palm licensees, refused to prolong the license and, accordingly, to sell PalmOS-compatible PDAs pointing at the high licensing fee. Well, someone comes, someone goes – Samsung starts selling its first smartphones based on PalnOS 5 – SGH-i500.

They were losing people, too. Steve Sakoman, who came to PalmSource after they acquired Be, returned to his alma-mater, Apple. Maybe he was just tired of the never-ending organizational period. Moreover, having suffered serious losses in the first quarter of 2003, Palm shifted the separation of PalmSource to the coming summer, because there was no money for this procedure at that moment. Meanwhile, PalmSource was already quite ready for this, having brought its first profit in spring.

As for the overall situation… Yes, the Tungsten didn’t take off right. Corporate clients cut their budgets. But the Zire was quick to notch the 1 million sold units mark. As for high-end, Palm launched the Tungsten T2 with twice as much memory (32MB), improved screen with 320x320 resolution, integrated Bluetooth, PalmOS 5.2.1 with Graffiti 2 support and a lot of multimedia software. The summer results were reassuring enough. Although the world’s PDA market is shrinking (by 10% compared to the same quarter in the last year), Palm retains its share of 39.9%. The loss during the last quarter was only worth $15 million.

Handspring didn’t show up, buried deep in its own problems. It thundered in summer. Palm was buying the company, which in fact was its junior brother. Moreover, this junior brother had been often viewed as a smarter and more successful one. When Palm had had to face difficulties, some analysts considered Handspring a potential Palm buyer, although Hawkins never mentioned such plans. It all turned to be otherwise in the end. While PalmPilot was a revelation in its time, and Hawkins was elected a member of National Academy of Engineering, the Treo… The Treo was a good product, but didn’t jump over the bar set in 1997.