Hi Matt,
Not so much granting licenses to one or two Taiwanese company is any big concern for Palm, but the method of how the OS is sold raises a lot of questions about the Palm strategy. This is THE most important subject among Palm investors. For the long term earning growth, hardware is almost irrelavant.
The bad thing is that we have nearly no data on how the software is sold, and under what type of contract it is sold. It's time for the management to make a concrete plan to promote the OS, and if needed, we have to spin off the hardware unit and turn Palm into a 100% software/service company. There is so much advantage to this. For sure that the stock will appreciate MUCH more, and even more importantly, it is healthy in the long run.
Why is now a good time to separate the software from the hardware?
Palm OS has enough licensees that it no longer needs an in-company hardware unit to ensure its growth. Palm is also trying to do too much at the same time. Splitting up the company will increase the attention that each side demands. It's a contradiction in the business model to have both the hardware unit and the software unit under one roof running by one leader. This leads to compromises that doesn't yield the best result for neither. This type of control stops innovation; this type of system creates confusion among everyone. Break them up, so that Palm hardware can make iPaq-like devices using CE. Break them up, so that the CE guys (Compaq, HP, and Casio) can push their engineering talent and manufacturing mights to the Palm OS platform. Sure, once broken up, the hardware unit will worth less, but the OS unit will truly shine from both a business standpoint and a financial standpoint. Palm Hardware will have to face its ever diminishing marketshare, but please, Yankowski, don't let that loose your OS dominance. The Palm OS is such a precious thing. Yankowski, if you are listening, don't make the same mistake on the Palm OS as Microsoft has been making with Windows CE, spin it off, and free it from the internal conflicts (such as a M500 delay) that's holding back the power of the OS.
Regards,
Khan |
