Yearly Archives: 2010

Palm To Partners: Bend Over

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Looks like Palm is up to their old tricks: screwing their partners.

I have a long history with Palm, for good and for bad. In about a one year period, Palm screwed Infinity Softworks three times, costing us millions in revenues.

The first time was when Palm dropped their education team. Palm had a very experienced, excellent team focused on the education market and handhelds as a a 1-to-1 solution. We made a bet-the-company decision and focused on graphing calculators in the 6-12 grades. In order for us to be successful, though, we needed acceptance on the College Board’s Advanced Placement Calculus exam. With that we had two states and lots of districts ready to put us on the approved list. We spent two years gaining acceptance on the exam, with Palm’s help, and just as we were approved for trials Palm fired their education team and the College Board backed out.

The second time was when Palm switched their backend software service from Handango to PalmGear, at that time the two primary leaders in mobile software sales. It wasn’t the switch but instead the terms: Palm + PalmGear started taking 65% of the MSRP for themselves and wanted us to develop a custom version of the software for their site without any urls, email address, etc., that could link back to our own web site. (When Apple entered the app market it was still like this. 30% margins felt like heaven!)

The third time is when Palm stopped bundling powerOne Personal. We had bundled an app with almost every Palm device for 7+ years, always giving them a product for free (we made our money on upsells). As we approached the release of a new device, Palm kept changing the requirements. Finally, with one week to final build, Palm asked us to localize our app into five languages. We lost 75% of our revenue within months, practically killing the company and any attempt to recover from the education bet.

I was hoping, with their downfall and the return of some great people from the early days of Palm, that the stripes had changed over there. But it looks like that is for naught. Palm had a deal with Motion Apps to provide a Palm OS simulator. While the simulator was not bundled it did require a ROM bundled with the device, which Palm has removed with webOS 2.0, apparently in breach of contract.

What a shame. Palm, in its early days, was an amazing company with incredible people. I know a number of those people are still there or returned but it is sad that the company DNA has been corrupted and destroyed. I have every right to be mad at Palm and wish for its demise, but instead I look back at that company and the work we did there and am just saddened that all that potential was tossed away.

Apps Are Not Software

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There used to be a thing called software. In fact we still buy software for Windows and Mac computers, but it also used to be purchased for Palm and Windows Mobile handhelds.

With software we spent a month or more making a purchasing decision. We downloaded a trial, installed it and played with it. We emailed or called support to see if it did this or did that or whether the bug that was found would be resolved soon. And then, if the stars aligned, we bought the software.

What Apple did was invent something new called apps. Apps are disposable, simple products that we buy and discard at will. Some apps we use for a long-time, like our calendar and instant messaging apps (and powerOne!), and some are temporarily retained until we move onto something else.

With apps we buy and then play. If there is a problem we just discard and move on. It is not unusual, with apps, to buy three or four products in a category, discarding the ones that didn’t serve the purpose.

Apps are descendent from software. To refer to it biologically, apps are to software what humans are to monkeys: we share similar DNA and are in the same family but they aren’t the same. And just like humans and monkeys we shouldn’t confuse the two.

As a developer, I still tend to think like software. We create extremely flexible products that run on smartphones and do any kind of calculation. Some people want that, these very powerful and flexible apps that are meant to solve a broad range of problems for a broad range of markets.

But most don’t care. They want an app they can use right away, use for their purpose and then throw away when they are done with it.

Don’t get me wrong: this isn’t a negative post. I am not bemoaning this split between software and apps. Software is still thriving, especially on the web where we have apps to extend those web versions to local devices. All we need to do is look at the Evernotes, the Dropboxes, the 37Signals of the world.

My points is that there is a software descendent now called apps and, frankly, all of us developers need to consider that, especially in this brave new mobile world.

Now There’s An App For That

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For years, we were the only ones.

Sure there were other calculators made by shareware developers or guys in their living rooms who tried to compete. But no one came close. After all, we had an advantage. Teri Graf, my long-time VP of Sales, and I went out and completed bundling deals with everyone selling anything related to the Palm OS (back when that was the only game in town). We bundled stripped down powerOne calculators with Palm, Sony, Garmin, Franklin-Covey, SUPRA Products (now GE Security) and other company’s hardware devices. And if we couldn’t own the relationship, we bought out the guy who wrote the software, as in the case of Rick Huebner’s Parens, bundled with Handspring devices. (An extremely accomplished developer, Rick’s still with me a decade later.)

We didn’t earn much from the bundling, mind you. In fact, most of those 15 million+ units were free give-aways. (My friend and co-worker Dick Luebke called us the greatest charity in Oregon for the millions of dollars of free software we gave away.) But we earned a small company’s income from those residual sales to higher functioning calculators and those sales, coupled with Angel funding, gave us the freedom to try to topple the kingpins of math education, TI, Casio and HP.

That didn’t work out. Our plans were dashed by Palm’s shifting focus. And when we came back to mobile, the landscape was different. In essence, we needed to start over.

So we spent a lot of time thinking. What makes powerOne unique? Why do our customers keep telling us they can’t live without it? Why could our products demand and get 3 to 6 times per copy what other calculators were getting? Was it the breadth of calculation? Was it the template form factor, so nice on a mobile screen? Was it the all-encompassing nature of the app?

But it wasn’t until we spent a year in the hyper-competitive world of iPhone that it became clear. It’s the ability to create.

In the desktop world we have spreadsheets. Spreadsheets are amazing products for letting people with little or no programming skill write an application. It was intended for computation, a next-generation calculator. But it became way more than that. It’s an application for writing your pro forma financials. It’s an application for creating an expense report. It’s an application for tracking your calories. You name it and the spreadsheet was used to create an app for that.

In  the mobile world that didn’t exist. There was no good way to satisfy the insatiable need for personal or business-oriented apps except to shoe-horn an existing app for your need, squeeze a spreadsheet into that tiny screen, or hire a developer to write one for you.

Except with powerOne.

Now this used to be simple stuff. Modeled after HP Solve, you could enter a formula and it’d turn it into a little, simple application for capturing and analyzing data. But even we never gave our customers the full power of creating templates as sophisticated as ours. And we never really gave our customers the ability to do things with that data.

And that was the realization. Welcome to the new powerOne. With our iPhone version leading the way, we now give our customers the ability to write sophisticated, mobile data capture and analysis applications and to share those results via email. And if you aren’t into writing? No problem. We have created hundreds for you to just download and use.

Now there’s an app for that.

Today’s Leaders Are Not Tomorrow’s Winners

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Last week in a post I was writing primarily to discuss why Amazon’s pending Android Store and the launch of Windows Phone 7 were good things, I made an off-handed comment that we are currently selling about 200 million smartphone units per year in a six billion unit market (every person on earth). That’s roughly 3% market penetration.

Is that enough to know the eventual winner?

Let’s look at a little history: the personal computer market. Jeremy Reimer put together this excellent web site with data, up to 2005, of desktop and laptop computer sales. In 2005 manufacturers sold 197 million desktop and laptop computers. 3% of that number would take us, roughly, to 1984 when 6.3 million personal computers were sold. In 1984, the leader in the market was the Commodore 64 with 40% market share. The PC operating systems (variants of DOS, I am assuming, although probably predominantly MS-DOS) was second at 32% of the market and at #3 was the Apple II at 16%. Of course NONE of these operating systems are around today and Amiga (who owned the Commodore brand) doesn’t make computers. Windows took over from MS-DOS and Mac OS took over from the Apple II.

In the smartphone space today, Symbian controls 41% of the worldwide market with RIM, Android and iOS all bunched together at 18%, 17% and 14%, respectively ¹.

Like I said last week: anyone who tells you this fight is over is selling you something. Chances are, when the dust settles, not only will the major players change but so will the operating systems we are using.

¹ (Q2, 2010, Gartner)

Amazon, WP7 and Market Competition

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Competition is good… as long as it is really competition.

Some interesting news the past few weeks. Amazon is set to announce their own Android App Store, which is great for the Android market. We worked with Amazon for years selling packaged software. They were always a solid partner who paid on time and were reasonable with their fees. I would expect no less here.

And of course we have the big Microsoft unveil, launching Windows Phone 7 and a handful of devices. I look forward to seeing their new OS in person. The images and videos I have seen so far are very promising.

While some have been lamenting the rise of another store and another OS, I see both as positive.

  • Amazon has a history of making the buyer experience exceptional. Reviews, cross-promotion, detailed information are all hallmarks of their store front. The Android market could use some good ol’ fashioned selling after all, as the Android store front is a mess.
  • When you want to buy a toothbrush there isn’t just one place to do it, right? Why should the Android world be any different? Now we’ll have choices: the carrier stores, Android store, Amazon store… this is all good AS LONG AS they are not exclusive, as long as I can download an alternative store front to my device and purchases made in one store front are available to my new device, whether I am on the same carrier or not. Since none of the details are known, I won’t speculate. (I know, it is easy to do so.)
  • Same for Microsoft. A choice for hardware partners who may or may not like the Google Android game, now those partners have an alternative choice. As for developers we should be rooting for WP7 as it means consistent UI and interfaces to develop toward with exceptional developer tools, at least if what Microsoft is saying and their history is any indication.

One final thought: anyone who tells you this market has been decided this early in the game has something to sell you. We are a couple of hundred million units into a 4-5 billion unit market. That’s about 5% smartphone market penetration. We have a long way to go before this fight has been settled.