Handspring

» see handspring.com as it lived, on the wayback machine

~ the eulogy ~

Nine hundredths. That is what one Handspring share converted into on 29 October 2003: 0.09 shares of palmOne, the company Palm renamed itself the same day it absorbed the business its own founders had left to build. Thirteen point nine million shares went out to Handspring holders and the whole transaction was worth about 240 million dollars in stock.

Jeff Hawkins had started Palm Computing in 1992 and sold it to US Robotics in 1995, and US Robotics went to 3Com in 1997, so by the middle of 1998 the people who had designed the PalmPilot were two acquisitions deep inside a networking company. They asked for the handheld business to be spun back out. They were told no. Hawkins resigned in June 1998 along with Donna Dubinsky and Ed Colligan, and the three of them incorporated Handspring instead.

The first thing the new company did was license Palm OS from the people it had just walked away from. Handspring paid 3Com for the right to ship the operating system its own founders had commissioned, then put a modified version of it in a cheaper box with a USB cable and a slot in the back. The Visor shipped in September 1999 at 149 dollars, over a million went out in the first fifteen months, and revenue reached 370.9 million dollars in the fiscal year to June 2001.

That was the high-water mark, and the same 2001 that produced the revenue number produced the collapse. Handhelds stopped selling. Handspring bet everything remaining on a handheld with a phone in it, and the bet was correct about the future and four years early for its own balance sheet. Palm announced the purchase on 4 June 2003 and shareholders on both sides approved it on 28 October.

~ the dossier ~

~ why they left ~

Money was never the complaint. Palm under 3Com was a profitable division inside a company that thought of itself as a maker of network cards, and the people running the division could not get decisions made about their own product line. Hawkins wanted to build the next thing quickly. 3Com wanted a quarterly contribution.

The joke of it is that 3Com gave in eighteen months later. Palm was spun off in an IPO in March 2000, which is what the founders had asked for, and by then they had a competitor built and a launch behind them. For the following three years the handheld market was a fight between one company started by Jeff Hawkins and another company started by Jeff Hawkins, both shipping the same operating system, both selling into the same shrinking category.

~ the stock ~

The offering priced at 20 dollars on 20 June 2000 and traded at 27 the next morning, touching 28.25 before it closed at 26.93. On paper that made a two-year-old company with one product worth 3.6 billion dollars. Its own annual report, filed for the year ending June 2002, put the market value of the shares held by non-affiliates at approximately 93.1 million as of 31 August that year.

Nothing dramatic happened in between. There was no fraud and no recall. The handheld market simply stopped growing in the second half of 2001 and Palm cut prices into the slowdown. Both companies then found out that the thing they sold was about to be absorbed into the telephone everyone was already carrying.

~ the treo ~

The Treo 180 arrived in February 2002 with a thumb keyboard and a GSM radio, and the Treo 90 that April was the last handheld Handspring made without a phone in it. By the Treo 600 in late 2003 the product was being sold under the Palm name, because the company that designed it had been bought before it shipped. A thumb keyboard under a screen, with the calendar and the phone book running as one thing, arrived in that line before it arrived anywhere else.

Selling one required a carrier, and carriers were the part Handspring could not buy. Turkish mobile in 2002 was Turkcell and Telsim selling voice and text, largely prepaid, with handsets bought outright from a shop rather than bundled into a contract, and the early GPRS tariffs charged by the kilobyte. A device whose value was constant data on a subsidized plan had nothing to attach itself to here. Turkey skipped the organizer and then skipped the organizer with a radio in it, and arrived at the smartphone years later by way of a Nokia that everybody paid for in cash.

~ where everybody went ~

Colligan ran palmOne and then Palm until June 2009, long enough to launch the Pre before handing the job to Jon Rubinstein; HP bought the company the following year. Hawkins and Dubinsky left handhelds entirely and started Numenta in 2005 to work on cortical learning theory, which is what Hawkins had wanted to do before he ever designed an organizer. The operating system Handspring had spent five years paying license fees for went into PalmSource, spun out on the same October day, along with the Be assets Palm had bought in 2001. ACCESS in Japan took all of it in 2005.

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