We were having some discussions yesterday about how Palm, in its ten year history as a public company, was a complete and utter failure. One really stupid move after another doomed Palm. A history:

• Before going public, Eric Benhamou, then CEO of 3COM who owned Palm Computing, proclaimed that Palm would never be spun out as a public entity. Donna Dubinsky and Jeff Hawkins, the creators of the company, said screw you and left.
• 10 months later, Palm was a publicly traded company.

And thus the stupidity begins.

• Palm decides that the only way to survive is to license the Palm operating system against Microsoft’s onslaught.
• Palm, under a series of inept CEO’s, loses focus on what got them there to begin with: being the greatest personal organizer in the history of computing. Instead, Palm decided they could be all things to all people, trying to compete head-to-head with Microsoft.
• The last of Jeff Hawkins amazingly designed innovations goes to market: the beautiful, elegant Palm V. To this day I think it is still one of the most beautifully designed portable computers and inspired an entire line of products from the company with color, higher resolution displays.
• Donna Dubinsky and Jeff Hawkins form Handspring, license the Palm OS, and pick up the innovation mantel with expansion ports and, eventually, the Treo smartphone.
• Palm ships 3 or 4 new devices each year, making it impossible to buy a device and feel good about owning the latest and greatest for more than a month. Also, the company changes the stupid connector on every freakin’ model, meaning customers have to purchase new accessories with every device and pissing off hardware accessory makers everywhere.
• Sony, Garmin and others license the Palm OS. Rumors swirl that there is unrest among the licensees that there isn’t enough of a wall between the hardware Palm and software Palm.
• A series of idiotic marketing decisions are made: naming of the two halves of the company, device decisions, and my all-time favorite: the so-called “Palm Economy”, or in other words the biggest load of b******* ever heaped on a developer community that was getting less and less support from Palm.
• Handheld sales, meanwhile, are dropping every year since 2001 and Palm is investing heavily in vertical markets such as education, FIRE (finance, real estate, insurance), and medical.
• The OS is spun out into a separate company, Sony stops making Palm OS handhelds, and Palm hardware buys out a failing Handspring to get the Treo and its executive talent back.
• Treo becomes the hottest smartphone on the planet, selling a few million units per year.
• Palm hardware licenses Windows Mobile, completely confusing everyone who wants software to run on a Palm.
• PalmSource, the old software arm that was spun out, gets bought by Access and put out to pasture.
• Palm believes there is no future in handhelds and fires or re-assigns everyone specifically focused on selling those, wasting a $1 billion investment in the education and medical fields.
• The Palm TX ships, the last and greatest of the Palm handhelds. It was, for those that never used one, an iPod touch four years ahead of its time. By the way, for those of you counting, iPod touch has sold 40 million units in four years. Apparently there is no future in handhelds.
• Microsoft stops innovating with Windows Mobile and Palm OS is stagnant so there is no major changes in Treo devices over the years. Since there is no platform innovation, developers aren’t making any money either.
• The Palm Foleo is announced. The Palm Foleo is canceled. Jeff Hawkins disappears.
• Jon Rubenstein is hired as the latest in a long line of CEOs. Ed Colligan, Todd Bradley, Eric Benhamou, and Carl Yankowski are just the CEOs of the publicly traded Palm before Jon. David Nagel was CEO of PalmSource when it was a spun off company. Not bad for 10 years!
• Palm announced webOS and the Palm Pre. Everyone gets excited but devices don’t ship for months and the development environment isn’t ready yet. webOS is an awesome OS using web standard technologies to develop apps.
• Palm Pre has nice UI but no one has any clue who it is being marketed to. Palm undergoes some torture by trying to sync music directly from iTunes without Apple’s permission. That stupidity ended with Palm giving up. Palm commercials are weird.
• Palm ships the Pre; webOS in limited beta. You have to be on the short list to get invited and those invited seem to be old Palm OS developers. It was a nice idea to reach out to the base but Palm needed web developers excited. The old Palm OS developers needed a C kernel. Palm swears they won’t make C code work on the Pre.
• The Pre launches on… wait for it… Sprint. A lot of Sprint customers buy it. No one else switches carriers. Palm then launches the Pixi, which is the Pre without something.
• Palm announces that C code can now be used as a kernel for developing on the devices.
• Palm moves to Verizon and AT&T but is overshadowed by Android and iPhone on the two carriers. Bad timing.
• HP buys Palm, putting an end to a torturous 10 year existence as an independent company.

Writing this was a little cathartic, I have to admit. Hope you’ll add to my recollections in the history. If you are curious about the history before going public, check out Piloting Palm. Very interesting read.

Now we are talking! If I wasn’t a developer trying to sort through this crazy mess I’d be ecstatic about what is happening in the mobile computing space. Real competition is here and we should start to see some serious shake out over the next few years. Let’s recap the operating system players:

Nokia
Not one, not two but now three OS possibilities for the company. The world leader in all things mobile announced a partnership with Intel this week for an OS called MeeGo, which is built on Intel’s Linux-based OS Moblin. Now Nokia supports Maemo on their high-end devices and Symbian on their low-end smartphones.

Where does MeeGo fit in? I don’t know. I met with a couple of Intel folks involved with this project last week. Will Intel finish what they started? Will people adopt Moblin as a part of the entire stack from Intel processor through OS? I can say the crew is doing interesting things for developers for sure but I can’t say whether it will matter as us developers need hardware and lots of devices sold to make it worth our while.

Apple
Now we have the iPhone, iPad and iPod Touch. Apple will likely be announcing new devices in March or April (for summer release) and likely OS4 in July. They are still the thought leader in the US. I don’t see that changing any time soon.

RIM
Great demo this week of a real, WebKit-based browser on a BlackBerry smartphone. This is a huge change for the company and starts to establish a general standard for browsers as Apple, Google, Palm and RIM now all use WebKit. On top of that, with Microsoft’s intro of Windows Phone 7 this week, it ensures that RIM is the only smartphone company focused on business customers. Hello! RIM could use some competition here!

Speaking of business customers, I’m afraid RIM still doesn’t get it in one respect. I keep trying. Maybe someone else can get through to them. Somebody tell RIM that small companies don’t care about BES. They want the features for sure but few small businesses will be implementing their own exchange server and BES to control their remote devices. Why don’t you set up a service that provides BES capabilities but doesn’t require any of the technical know-how? I just don’t get how RIM can’t see this as the real opportunity here.

Microsoft
Who would have guessed that Microsoft could pull this off. If I was a betting man I would have bet Microsoft would develop a device focuses on the enterprise, their bread and butter. Instead it’s much more consummerish (based on the demo) with the same kinds of social media integration features that Palm and Motorola have integrated. Maybe this social networking notification ability has deeper meaning that hasn’t been revealed yet for businesses. One thing to remember, developers, no backwards compatibility here. Windows Mobile apps won’t run. This also means that there is zero devices sold with Windows Phone 7. I don’t think it is vaporware but MS has a long way to go to catch up with 100m smartphone sales per year by Nokia, RIM and Apple combined.

Google
The new kings of licensing, of course, haven’t gone anywhere as Android is rumored to be rolling out on over 20 devices this year. On top of that, Chrome OS for netbooks and, likely, tablets will be of interest to hardware vendors always playing catch up to Apple. Clearly Google is a long-term player here.

Palm
And one of the nicest OSes for developers, webOS, from mobile innovator Palm is vialable, too. I expect sales of webOS devices to grow substantially this year as AT&T and Verizon pick up the Pre and Pixi. Given that the competition is stiff. I believe the days of Palm being the big player on the block are over but that doesn’t mean they can’t be successful financially. The question is can Palm find a niche that can be lucrative? In other words, can Palm find a core capability highly prized by customers that will separate them from the pack. I’m afraid their current emphasis isn’t it.

I happened to be on vacation when the iPad was announced. I was in Florida for a week of R&R. Being this far from home (3000 miles from Portland, OR) and leaving my laptop at home afforded me two unique perspectives on the device.

The first perspective had to do with my 83 year old grandmother. For years when we came down she would ask if she should get a computer. Finally last year we bought her one. I thought she’d use it for two main things: Skype to see her great grand daughters and a browser to read the blog I write about my girls. The computer, when I arrived last week, was sitting exactly where I left it the year before. Even though I wrote her detailed instructions and practiced with her, she’s still afraid of it.

And honestly I can’t blame her. When I turned it on all these dialog boxes popped up, upgrade notices, app upgrades and the like. Even I felt overwhelmed.

I think, in the not-too-distant future, the iPad will be perfect for her. Initially it’d be a great device for seeing the web site. And later, as Apple adds a camera, it’ll be perfect for video conferencing. It’s simple to use: no right mouse clicks, no dialog boxes popping up at her, none of the things that makes computers so scary.

The second realization occurred on my way home. We had a 5+ hour flight home and I usually pack multiple books, mp3 player, etc. I’ve also been working on both product and business plans. The ability to conveniently carry all the things I need in one system that could go the whole trip is extremely exciting to me. No guessing what I’ll be in the mood for 3 hours in, I’d just have it! Feel like reading? It’s there. Have a product idea? I can write it down. Burned out? I can watch a movie or play a game.

I’m very excited. I’ve wanted a device like this for a decade, seeing it as a great way to read books and PDF documents. I thought about Kindle but it doesn’t handle PDF well and… well, I didn’t know why.

Now I do. Kindle felt like a compromise. The iPad, based on spec and videos, is so much closer to the right device. I’ll be in line early when it is released.

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A side note: Clayton Christensen writes about disruptive and sustaining technologies. When a new product enters an existing market, often times that new product feels like a toy to the incumbents. Compared to laptops — for people who are in the tech business — the iPad is a toy. But to those not in the market — many consumers who are either frustrated with the experience of PCs or those who haven’t bought one — the new product is extremely appealing. And over time that new product gets more and more powerful. This is how DEC, IBM and the like felt about Microsoft, Apple and Intel in the beginning, too.

There is one thing clear in the business of product marketing and that’s that those that figure out who their customers are and cater to them win. This is no different in the mobile world than it is anywhere else. The future winners in the smartphone world will have laser focus on their value statements.

A Mobile History

Once upon a time, there was an upstart company named Palm. Jeff Hawkins, one of Palm’s founders and its creative lead, was unhappy with the various mobile systems that came before, having worked on some of them and been observer of others. Jeff felt there had to be a better way and a better purpose.

His belief: that the purpose of this device is to organize his personal information. He spent months walking around with a carved piece of wood in his pocket. Periodically, he’d pull it out of his shirt pocket to check his calendar, to do list, perform a calculation, or look up a phone number. Of course, he didn’t really do any of those things as it was a piece of wood, but he pretended. And through this process refined the device, operating system and product features which became the first massive success in mobile computing.

After Jeff and the original crew left to form Handspring, Palm Computing invariably lost it’s way. Instead of continuing to advance the greatest personal organizer in the history of organizers, Palm played feature war with Microsoft’s Pocket PC (later Windows Mobile) operating system, confusing it’s customers and eventually falling in such disrepair it licensed the competing operating system.

Flashbacks

After 20 years of innovation and advancement, fits and starts, handheld computing is mainstream. These modern devices, combining yesterday’s handhelds, today’s cell phones, and add-on software, will sell in excess of 100 million devices this year alone. And while Apple isn’t the sales leader, they clearly are the thought leaders with more than two billion app downloads.

But it’s not Apple’s applications that have made it so successful. It’s Apple’s laser focus on an entertainment device that makes it so spectacularly successful. World-class browsing? Check. Elegant, simple device? Check. Cameras, video? Check. Music? Duh. Oh… and lots and lots of games.

But Apple wasn’t the first to make mobile take off here in the Western hemisphere. Arguably, RIM with their ubiquitous BlackBerry devices has been even more successful. Figuring out how to penetrate the IT department through control and security, figuring out how to make business people and administrators everywhere salivate like Pavlov’s dog every time the red light blinks at them (new email!), RIM, too, was laser focused.

And the rest? Well, not so much. Microsoft and Nokia were busy creating devices that included everything but the kitchen sink. Palm, too, disintegrated into this world. Who could really blame them? Customers were pulling them in all directions and, with the only history of technology in the modern era being PCs, clearly the licensed operating system was the only way to go.

A Look Ahead

It’s too early to quit, but it’s not too early to predict some winners. Assuming they stay focused on their core constituencies, Apple and RIM will be clear winners. Both have carved out a large but prominent niche in this new mobile world.

Symbian (the operating system some of Nokia’s smartphones), Microsoft’s Windows Mobile and Google’s Android are bigger questions. They cater to a niche — hardware companies that don’t want to write their own operating systems. The problem, of course, is that consumers buy combined devices, hardware and software, and to cater to a wider net of potential hardware licensees, these operating systems must expand the breadth of capabilities. And customers have shown that, at least in the mobile world, they don’t want products that don’t do everything well.

For this reason, Android and Symbian have a leg up. Since they are open source, it allows the hardware vendors to mix and match features with their target niches. While this is a major problem for software developers who need consistency across devices, it gives the hardware vendors the ability to focus on their own niches, assuming they can define one.

The big question is, though, where are the additional niches? Is there room for more than two players in this space and, if so, what customer are the others focused on? Does Palm fit into this picture with their proprietary hardware and software? Is an integrated web/mobile device, as Palm is basically pitching it, a real opportunity and do customer think of themselves this way?

While no one knows for sure who the winners will be, you can bet that whomever it is has a clearer focus on their customer than the others.