Hiya Cap,
Gee, someone finally noticed. <g>
--
June 25, 2000 9:00pm
Palm Acquisitions Map Broad Mobile
Plan
By Todd Spangler Inter@ctive Week
Palm grew to prominence with a simple approach: Its
handheld companions performed just a few basic,
user-friendly, personal information management functions.
Now, its business is getting more complex as Palm tries
to steer away from its dependence on the money it
makes from selling hardware. The company sees its
flagship devices -- more than 7 million have been sold to
date -- becoming a great deal more than just personal
information managers, or PIMs, a term that these days
has derogatory connotations. In fact, as its first two
acquisitions as an independent company attest, Palm
(www. palm. com) would like its calculator-sized devices
-- or more precisely, the operating system that runs them
-- to serve as the foundation for just about every mobile
activity in which you engage.
In late May, Palm said it would buy online calendar site
AnyDay.com for about $80 million in cash and stock. The
following week, Palm said it would snap up, for about $4
million in cash and stock, Actual Software (www.
actualsoft. com), a small software developer based in
Andover, Mass., that sells Internet mail client software for
use with Palm's operating system, the Palm OS.
Now in the later stages of spinning off from parent 3Com,
Palm raised more than $940 million from its initial public
offering in March.
Palm envisions offering a "portable portal" through the
AnyDay calendar that will not only let users store their
calendars -- and access them anywhere -- but also act as
a window into other e-commerce. For example, after you
synchronize your Palm calendar with AnyDay, you might
be offered tickets to concerts in the city to which you're
traveling that match your personal profile. Actual's
software lets Palm offer a much more full-featured e-mail
client, though the company hasn't indicated exactly in
what form it plans to deliver Actual's MultiMail product. In
Palm's view of the mobile landscape, the AnyDay and
Actual acquisitions also fit very nicely into Palm.net, the
wireless Internet service it offers through BellSouth
Wireless Data (www.bellsouthwd.com).
Analysts say Palm must continue to differentiate itself
from other personal digital assistants in the category --
not just those running Microsoft's (www. microsoft. com)
Pocket PC, an improved version of the Windows CE
software for handheld computers, but also those of Palm
OS licensees, such as Handspring
(www.handspring.com).
The company is taking the necessary steps to make the
Palm OS into a platform for wireless communications,
says Rebecca Diercks, director of wireless research at
Cahners In-Stat Group. "They've received a lot of pressure
from their user base to improve the functionality,
specifically on messaging and calendaring," she says.
Palm's strategy mirrors that of PC makers Compaq
Computer and Gateway. Both companies have diversified
beyond selling hardware -- which tends to be a low-margin
commodity business -- by adding more software and
services. Palm says that, as of the end of 1999, it derived
about 99 percent of its revenue from sales of Palm
handhelds. To be sure, it's a business that has proven
profitable; however, Palm executives warn that its revenue
will grow more slowly this year as it faces shortages in
flash memory and LCD screens.
Ultimately, Palm seems to be positioning its handheld
OS -- which has an estimated 78 percent market share of
handheld computer platforms, according to International
Data Corp. -- as the de facto standard for mobile
computers and appliances, just as Microsoft's software
has been for PCs.
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