The Future of Palm

Posted by: Stephen Wildstrom on September 04, 2007

While I agree with my colleague Cliff Edwards’ post saying the Palm made the right move in canceling the Foleo “companion device,” I’m considerably less sanguine about how much help the new Centro handset may bring to the struggling smartphone maker.

The Centro, which was prematurely announced by Sprint in August, will be smaller and cheaper than any Treo while still sporting a full qwerty keyboard. It should help Palm regain some of the market share it has lost to Windows Mobile devices, BlackBerrys, and the iPhone.

But Palm’s real problem is that the Palm OS Garnet software that the
Centro will run is a fossil, increasingly uncompetitive with more modern offerings from Microsoft, Research In Motion, Apple, and Symbian. Palm’s big problem is that it only recently reacquired the rights to its own software, which had been spun out to an independent company called PalmSource that was then sold to a Japanese software house called Access, and neither PalmSource nor Access had done much with the code they inherited from Palm.

The fact that Foleo was the brainchild of Palm founder Jeff Hawkins meant that it was certain to be an interesting product because Jeff doesn't do dull. But I feared from the time it was unveiled last May that Foleo was going to be a distraction from Palm's critical job of fixing its software.

Palm is working on a new generation of Treos--whether they were to use that brand or not--built on a new Linux-based operating system. It had hoped to introduce the first products later this year, but has had to push those plans back to 2008.

At this point Palm has to concentrate all of its limited resources on getting the new smartphone software done. Otherwise, it will likely become just another maker of Windows Mobile products, one that would at best be a distant second to Taiwan's HTC in that highly competitive market. The job is big and the time is short.