There you go again! Thinking of PALM soley as a box maker!
Did you forget that that they have only scratched the surface in margins? Laying the groundwork for a wireless ISP and content business takes lots of investment, it doesn't come free. Once they have laid the groundwork theirl monthly content and access fees will grow exponentially, thereby improving overall margins. Same can be said for their PALM OS licensing business....right now they have only scratched the surface!!! But once Hand, SONY, Kyocera, IBM, Samsung, Symbol, Garman, sell their PALM OS devices in the millions, that means millions of $$$ for PALM in royalties......this also leads to overall margin expansion. Additionally, everytime they upgrade their OS in the future, they will charge existing PALM users if they want to upgrade. The last PALM OS upgrades were free, but PALM plans on charging for the upgrades from now on, starting with the OS4. That my friend, is virtually 100% margins!!! Now imagine, if 13 million or so current PALM users each shell out $25 for the upgrade!!! Then when PALM OS5 comes out next year, they will be an even biger installed base of PALM users shelling out another 20 - 30 dollars for the upgrade. Well, you do the math!!! |
