Wednesday’s announcement that HP would acquire Palm for $1.2 billion halts–at least for now–the dramatic rollercoaster ride that the company has been on since its birth as a gleam in Palm founder Jeff Hawkins’ eye in 1982. Thank goodness, because Palm watchers have been nauseous following all of the company’s wild twists and turns over the years (though not as queasy as current Palm shareholders). Sorry, Steve Jobs fans, but Hawkins deserves a lot more credit for creating today’s world of ubiquitous handheld computing. Too bad that the companies he created to bring his product ideas to life could never quite get out of their own way. Strap in: Here’s our timeline of Palm’s tumultuous life.
Jeff Hawkins, an electrical engineer by training, leaves Intel to join GRiD Systems, an early mobile computing company.
Hawkins begins a two-year leave from GRiD to study biophysics and neurobiology at Berkeley. While there, he begins to work on handwriting recognition software that eventually will be Graffiti. Upon his return to the company, his primary project is developing the GRiDPad, a $2,500, pen-based portable computer designed for industrial markets.
Hawkins, who believes that a consumer market exists for handhelds, launches his own company, Palm Computing, at Esther Dyson’s PC Forum (the original startup-gets-five-minutes-to-demo-its-product-to-VCs-and-media debutante ball). His goal? To use his handwriting recognition tech as the base for a software company that will serve the booming tablet computing market, epitomized by the Apple Newton, which debuted a few months later.
Palm gets a lot of buzz at CES for its role in a joint venture with Tandy (Radio Shack’s parent company) and Casio (yes, please go ahead and laugh now if you weren’t already) on a handheld electronic device called the Zoomer.
The Zoomer Personal Digital Assistant debuts (available at participating Radio Shack stores!). Weighing in at a mere 16 ounces and with a $700 price tag, one critic says it has “about as much snap to it as soggy cereal.”
Hawkins complains to a Palm board member and VC about the state of the handheld business. We’re “selling add-ons for a zero-billion-dollar market,” he said. By this time, Palm software was available for everything from the Apple Newton to the HP OmniGo (this is called foreshadowing). The VC told him to build his own PDA.
Palm, running out of money, agrees to be acquired by U.S. Robotics, which made modems to dial up and access the Internet (stick with me, kids), for $44 million. It was the only potential suitor that shared Hawkins’ vision.
Jeff Hawkins debuts the “Palm Pilot” (technically the Palm 1000 and 5000), its own pocket-sized personal digital assistant. Although criticized by some early adopters as underpowered and light on features–a smaller (5.7 ounces), faster version of the “ill-fated” Zoomer–the $299 and $399 devices zoom off the shelves when they go on sale in the spring (becoming the then fastest selling tech product of all time) and winning 21 best product of the year awards.
Palm debuts the Palm III, which adds infrared beaming capabilities. By now, Palm is supporting a then unheard-of ecosystem of 5,000 developers creating software apps for the Palm PDAs.
Hawkins and Palm president Donna Dubinsky abruptly leave Palm, which is now owned by the networking company 3Com (it acquired U.S. Robotics in June 1997). The reason? A dispute about spinning off Palm and taking the company public in the booming stock market.
Hawkins and Dubinsky announce their own PDA company, Handspring. The devices it builds will run the Palm OS (Hawkins licensed the rights to it on his way out the door at 3Com).
3Com announces the Palm V, designed by Ideo, a device half as thick as the Palm III, with a sleek aluminum skin, a backlit screen, and a rechargeable battery. The Palm VII, which adds wireless capability, is also on its way in 1999, the last of the devices Hawkins created before leaving Palm.
Handspring announces its Visor PDA that includes a Springboard expansion slot to allow add-ons such as wireless Internet and music. It can’t keep up with initial sales demand. Meanwhile, Palm’s market share of the handheld computing market peaks at 80% and 3Com starts the process of spinning off Palm in an IPO.
Palm goes public at $38 a share. Its market cap peaked at $54 billion, more than General Motors at the time.
Handspring goes public two months after the tech bubble popped. Its shares debuted at $20 a share and ended the day at $26.94, giving it a $2.5 billion market cap.
Handspring, bleeding cash, announces what is, in effect, the first modern smartphone, the Treo Communicator. The phone includes the Palm OS and a keyboard, enabling wireless email and Internet. Although critically well received, it’s largely a flop because it tried to sell directly to consumers through retail and not via wireless carriers (anyone else getting a Nexus One tingle right about now?).
Palm acquires Handspring for $169 million in stock. Palm also decides to spin off PalmSource, its software subsidiary, to focus on hardware. The new hardware company is called PalmOne because PalmSource owns the rights to the brand name Palm (confused yet? You should be).
The Hawkins-designed Treo 600 debuts, and it’s a hit, turning Palm around and making it cool again. As one analyst said, “If PalmOne didn’t have this product, it would be dead.”
PalmOne buys the rights to the name Palm for $30 million.
September 2005 Japanese software developer Access Co. acquires PalmSource for $324 million.
Palm pays Access $44 million for a perpetual license to the Palm OS. The Palm OS runs its Treo smartphones and handhelds. It also secures the right to make improvements to the Palm OS.
In the same month that Apple will start selling the iPhone, Palm announces the Foleo, a screen and keyboard device designed to be a smartphone companion. The idea is that one would use this to write emails and edit Office documents received on a Treo smartphone. It is not well received. At the same time, Palm hires Jon Rubenstein, an Apple hardware engineer, to be Palm’s chairman.
Palm cancels the Foleo, its latest save-the-company Hail Mary pass, to focus on developing its next generation of software and the smartphones that will use it.
At CES, Palm unveils the Pre, its newest smartphone, and the WebOS that runs it. It is deemed the hottest product launch at the show, making Palm cool yet again. WebOS’s multitasking capability and clever people-centric approach win praise from everyone who sees it.
The Pre goes on sale exclusively with Sprint, the carrier that made the Treo 600 a hot seller in 2003. It sells 400,000 in its first five weeks, but it’s considered a flop after Apple sells that many new iPhones in a weekend.
Palm’s developer program for WebOS belatedly debuts. One reason for Palm’s hardware sales having ground to a halt is the lack of an apps ecosystem, the kind that fuels iPhone adoption (and that fueled Palm Pilot adoption in the late 1990s).
Palm reports another disappointing quarter as Sprint and now Verizon can’t move the Pre and Pixi smartphones. One analyst calls the company’s situation “an accelerating death spiral.”
HP acquires Palm for $1.2 billion.