How Palm Inc's CEO shot himself in the foot

THE ABILITY of some companies to annoy their core customers never ceases to amaze me. Palm Inc, the company formerly known as PalmOne, did that last month when it announced its embrace of arch rival Windows Mobile platform, with the announcement of the Treo 700w running on Microsoft's slimmed down Windows. And this week we found the company's CEO in damage-control mode, pledging continued support and a future for the company's PalmOS line of PDAs and smartphones. Apparently the CEO's love affair with Redmondia doesn't mean the end of Palm's long term relationship with the PalmOS. "I'm writing to you today because I'm concerned by the number of posts I've read that suggest that Palm's support of Palm OS is either wavering or short-lived," Palm Inc's CEO Ed Colligan said.

In my experience of watching the IT industry, I have come to the conclusion that the world of business and PR is in many senses similar to the world of politics: what you do is important, but what you say and how you say it is in many instances even more important, as every word is read and interpreted by pundits and the press as a proof of direction and both you and your company's strengths and weaknesses. It seems to me that Palm Inc's chief executive failed to understand this. Here's why.

Suicidal tendencies
PalmOne's fortunes increased greatly after its Treo 600 and Treo 650 devices, all PalmOS powered devices. In fact, an article from last July attributed PalmOne's phenomenal profit surge in the last quarters and all of last year to the successful Treo 6xx smartphone line running Palm OS. So, given that Palm's success and its main differentiating factor vs. Windows powered devices was the simplicity of the PalmOS software, one would have thought that the company's management understood this and would put all efforts into giving PalmSource a hand to make PalmOS even better. But no. Instead, the company "delighted" PalmSource by signing up with arch rival Microsoft Corp, which didn't lose any time in trumpeteting it everywhere, as the writing on the wall with regards to "Windows' Supremacy". In public relations terms this was the equivalent of the main bastion of resistance finally waving the white flag. When asked about my thoughts the day of the Windows Mobile powered Treo announcement, my reply was simple and I pointed to what Richard Stallman said.

And I was not alone. Comments on PalmOS news site PalmInfoCenter about the Windows-powered Treo included gems like: "By this statement, Palm is hastening defeat in it's smartphone leadership. Once again, I'm baffled." And, "Oh well. I'm still looking to the (Hong Kong based) GroupSense PDA camp for some coming innovation.". "It's really too bad that Handspring didn't buy Palm. The zen is gone." Another PalmOS Treo lover summed it up: "Palm and Windows Mobile. This is a sad day." which got as a reply "I agree - this is like seeing Windows running on my beautiful iMac - I feel like I am going to throw up".

Yes, these comments are emotional, and that kind of emotion is what makes OS advocates and developers the lifeblood of a company's mind share. By annoying them and embracing your main competitor's OS -and specially the one from the company that for years has been trying to bankrupt you - you lose your company's main asset. I thought CEOs would understand this.

With a little help from my friends
The Wall Street pundits and the rest of the Microsoft loving press were quick to trumpet this everywhere: PalmOS was dead, and Palm's move was just the writing on the wall. To my amazement, articles started popping up accusing PalmOS of being old, dead, single-tasking, "outdated", you name it. Suddenly the OS I learned to love over the years was a piece of dung (pardon my French). AP's Greg Sandoval was polite wrote: "Palm Inc.'s decision to use Windows software in its latest Treo smartphone is a victory for Microsoft Corp" specially compared to some Vole-praising "industry analysts" who joined in as well: "Palm has been stuck with this ancient operating system," said Todd Kort from Gartner, who concluded: "They had no choice but to modernize."

Ok, I get the point of analysts now. An OS like WinMob that requires more horsepower, more RAM, and is generally more awkward to use is "modern", while one that is lean, efficient, is able to sync with non-Windows OSes more easily, and is currently being ported to run on top of a Linux kernel - like Mac´s OS-X runs on top of a Mach kernel with a BSD subsystem), is "ancient". I see. AP's Sandoval analysis continued: "Treos have until now run exclusively have more limited multitasking abilities". Strangely, I'm able to multitask just fine with my PalmOS PDA, including playing MP3s, web browsing, you name it. But hey, I'm not a Gartner Analyst nor do I work for AP. So WTF do I know?.

Rob "Google is the new Evil Empire" Enderle horripilated with excitement, by saying: "Microsoft understands the back end and Palm understands the front end, and the two of them - if they can work together - they can do some incredible things" - whatever "understanding the back end" means. Infoconomy titled a story "Palm hands Microsoft mobile software control". Over at ZDNet, David Berlind drooled and joined the pack of wolves, with a story titled "Treo surfaces with Windows Mobile: PalmOS RIP". In the words of Berlind, the WinMob powered Treo proved his point that "PalmOS from PalmSource is becoming totally irrelevant if not dead altogether". All this "PalmOS is dead" press coverage, while the Palm.com web page continued describing the company -and still does, to this day, as "a market leader in Palm OS handhelds, software and accessory solutions. Creating a mobile lifestyle with your Palm handheld, powered by Palm OS". Go figure.

To top this all, the guys at PalmSource and Access Inc. had a PR nightmare on their hands, with Computer Business Review publishing an article by a guy named Rik Turner, which basically put the words about the demise of the PalmOS in the mouth of an Access Inc. executive. "I believe the CBR article misquoted the ACCESS spokesperson and took some statements out of context. PalmSource continues to support current versions of Palm OS while continuing to develop Palm OS to run on top of Linux. PalmSource is working with CBR to have the article corrected." said Palmsource's spokesperson. "The story is not true. ComputerWire and Rik Turner (the author of the article) have apologised and admitted that the story is not accurate. A retraction will follow" said Manuel Morales from Access Inc. (the company buying PalmSource). The story has been since pulled from the CBR web site. It would be very interesting to know and where that story originated, actually. It didn't prevent that story from resurfacing later, when someone cut-and-pasted it into the addict3d.org web site. That bogus story has been apparently pulled as well.

Neither ZDNet's Berlind, nor Enderle, much less Gartner Group's Mr. Kort explained why it would be so nice for consumers to let Microsoft extend its current windows desktop OS monopoly to smartphones and PDAs as well. Luckily for us PalmOS users, apparently Access Inc and PalmSource disagree with these doomsday preachers, along with Asian smartphone manufacturers like Qool Labs and GSPDA, and I anticipate that PalmOS will hopefully live on, to continue being a pebble in Mr. Gates' shoes, and a great alternative for some PalmOS lovers like me.

Feeling the heat
On Tuesday, and obviously feeling the heat from the PalmOS users' community -and probably also from PalmSource and Access Inc- Palm Inc's CEO went out of his way to "reiterate the company's support" for the PalmOS operating system: "I'm writing to you today because I'm concerned by the number of posts I've read that suggest that Palm's support of Palm OS is either wavering or short-lived," Palm CEO Ed Colligan said in a letter to Palm developers. It is neither," he said, and a Palm representative said the letter was to be posted to the company's developer Web site later that day. I also have to wonder if perhaps the indifference from the once loyal community about the company's latest PalmOS PDAs had something to do with it. After all, not too many people are buying PDAs these days, and those looking for a PalmOS smartphone from Palm Inc. might have stopped in their tracks given the company's public celebration of its upcoming Windows Mobile model.

We have to wonder whether this is this the same man who shook hands with Gates and boldly stated that his firm was embracing WinMob because it was better?, and now trying to win back the hearts of PalmOS developers and loyal PalmOS Treo users?

Conclusion
First, Ed Colligan gave Microsoft a hand and implied the PalmOS along with Bill Gates that Windows Mobile "offers some functionality that the Palm operating system doesn't have". Then weeks after this PR party, his company announced more PalmOS PDAs like the TX, and he's now trying to win back the "hearts and minds" of PalmOS users and developers. It may be too late.

After the Palm WinMob announcement, a Spanish blogger said: "Today, Palm Inc. officially shot himself in the foot". I agree, and since then I have dumped plans to buy a LifeDrive, and am looking at the Asian manufacturers' offerings for my next PalmOS smartphone. No pendular relationship with PalmSource or the PalmOS here. Others may be kind enough to give Palm Inc a second chance, but not me. Goodbye Palm Inc! QoolLabs, Groupsense, here I come! µ

See Also
PalmSource porting PalmOS to run on top of Linux kernel