The fruit of their effort was revealed on March 9, 1998, when 3Com introduced a new PDA model, which was to be the next milestone in the industry – Palm III. The device had 2MB of RAM (compared to 1MB in PalmPilot Professional), supported infrared connections, boasted a much improved character recognition algorithm and a slightly different, curvy, design. By the way, present-day PDAs with the pen interface, including PocketPC devices, more or less resemble Palm III in terms of their design.

Of course, there were other numerous innovations and improvements. Quantity transformed into quality: more fonts, a handy cradle design for synchronization with the PC, a new stylus, a folded lid that protected the screen, which had been left intact since PalmPilot and so on. Actually, none of this, including even the new version of the operating system (PalmOS 3.0), went far from simple error correction. They had been just polishing off to the ideal state the successful product, PalmPilot had been.

This could only push the sales volumes ever higher, of course, considering the absence of competition. WinCE devices were only making their first steps in the field and were hard to call successful. Psion had nothing new to offer compared with Palm. However, they had to do something new to keep their market share; simple evolution was not enough. That’s where Hawkins and 3Com collided.

First of all, Jeff and Donna had simply had enough of 3Com’s corporate culture. As many talented people, they preferred to run their own, even small, business rather than be a gear in the gigantic mechanism of the multibillion monster. Secondly, the heads of 3Com were pushing Palm into their main business – communications. Hawkins had other plans for his creation (from today’s point of view, he was wrong, though). Thus came the fateful 1999 year.

At the beginning of it, the company was at the top, if not higher. Palm had about 400 employees (four years before they had only 28 men on staff). Sales volumes were at the maximum: they sold the 3-millionth Palm. They had about two thirds of the PDA market (including keyboard-, stylus-interfaced ones and others – 7.4 million units in 1998 only). Thus, Palm had the first place in this market, ousting Sharp intended for WinCE. Palm licensed its copyrights to IBM with its Palm clone called “WorkPad PC companion”, to Qualcomm with its pdQ Smartphone prototype, to Sun that had licensed HotSync technology. Over 10 thousand developers from small and big companies were writing software for Palm.

That’s how things stood in the beginning of the year that happened to be a revolutionary one for the company. And in the first place it affected the product line, which was split in a very serious way. On the one hand, there continued a slow evolution of existing products like Palm IIIe (the same, but cheaper Palm III) or Palm IIIx (an attempt to do something about the memory. It came with 2MB and with an expansion slot for 2MB more).