The proposal had no alternative. Of course, the folks at Palm were not too eager to merge with a corporation, to become a gear in the gigantic clockwork, but no one else was offering the so badly needed money. Moreover, Palm Computer was promised a kind of independence in their actions. It was a deal. In the September of 1995, U.S. Robotics purchased a potentially successful product for $44 million and took up its creators along the way. There were 28 people from Palm Computer that continued to work for USR. This was more than enough considering that the OS was developed in collaboration with one of the technological leaders of that time, Geoworks, while U.S. Robotics itself was responsible for the hardware production.

In fact, they were going to start out with small amounts. According to Dubinsky’s estimates, it would be not bad to sell about 100 thousand items in the first sales year. But to err is human. In February 1996, they officially introduced the Touchdown to the public under the trademark of PalmPilot 1000.

The sales actually started in April and first three months were quite calm. But when the market digested the new thing… By the end of 1996, they had already sold 350 thousand devices! The first year and a half brought about 1.5 million units sales volume. They kept on the tempo. By the middle of 1999, there were 4 million pieces sold. By the beginning of 2000 – 6 million. Hawkins’ creation, much to the surprise of its father, turned to be the best selling computer in the history of the industry.

Well, the middle of 1999, the beginning of 2000… By that time, Hawkins and Dubinsky had nothing to do with Palm. Back in 1997, U.S. Robotics itself was bought– by the telecommunications giant called 3Com for $8.5 billion. Of course, that was quite another scale. While Palm felt quite independent inside U.S. Robotics, it became a small, although important, division in 3Com. Two years after the acquisition, in 1999, Palm accounted for 10% of 3Com’s sales volumes – about $570 million. Not bad for a secondary division of a company that is deep in the communication equipment manufacture. Well, 3Com bought U.S. Robotics for its main business, with Palm being a kind of makeweight (The laugh of fate: U.S. Robotics itself proved to be an unnecessary purchase and was set free soon).

Well, the heads of U.S.Robotics/3Com had always been irrationally driven to Palm. After the deal between 3Com and USR, Dubinsky and Hawkins came to 3Com’s head, Eric Benhamou, to ask for their division to be made independent again. They didn’t expect they would get a “No”. However, they were told that Palm would never be separated, as it was too important for the company. They had to succumb and keep on working in the corporate framework of 3Com.

Eric Benhamou

With PalmPilot Personal and PalmPilot Professional sales going on, notching the mark of about 2 million units sold, the developers were all busy with new models.

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