Palm A year ago, a Palm executive told me the company was willing to risk competing with itself by licensing its handheld platform to vendors such as Sony and Handspring. Besides the royalty stream, more vendors using the Palm platform would spur interest in handhelds in general, and the competition would keep Palm's handheld designers hungry, I was told. That strategy worked perfectly in 2000. Yes, Palm took a hit from Handspring, which now has about 15 percent market share, most of which was taken out of the hide of the Palm III series. However, Palm still has a 70 percent market share, which is hardly shabby, and its revenues are soaring because of overall unit sales growth in the handheld sector.
Palm is also about to realize significant licensing fees.
Besides Sony and Handspring, a variety of phone vendors such as Kyocera and Samsung are creating Palm-based smart phones that combine handheld and wireless phone functionality. The licensing is going so well that CEO Carl Yankowski said recently that the company is considering spinning off a new company to develop and sell the platform. Next year, look for Handspring to release new devices that go after the Palm V series. The only potential dark cloud on Palm's horizon, and it's far in the distance, is that its 16-bit platform is getting creaky, even with all the new wireless capabilities being built in. As bandwidths increase, the day is coming in which multimedia will become an important handheld application and the current Palm platform isn't up to the task.