Palm, Inc. announced today that it plans to split into three companies later this year. This marks the latest chapter in Palm's volatile history, which has been as much a tale of business acquisitions, defections and spin-offs as handheld technology.
PalmSource, Inc., makers of the Palm platform software, will be spun-out from Palm, Inc. as an independent, publicly traded company under the NASDAQ ticker symbol "PSRC." The remaining Palm division, the Palm Solutions Group, will be renamed palmOne, Inc. and its NASDAQ ticker symbol will change from "PALM" to "PLMO.' It will continue to market handhelds under the Zire and Tungsten sub-brands. At the same time, Handspring, Inc. will be dissolved and its operations, as well as its Treo smartphones sub-brand, will be absorbed into palmOne.
The third entity, a holding company owned 55% by PalmSource and 45% by palmOne, would own the Palm name and trademark.
palmOne will also adopt a new logo, which abandons the familiar Palm blue in favor of deep red and vibrant orange, the sub-brand colors for the company's Tungsten line of solutions for mobile professionals and business and its Zire line of solutions for consumers and multimedia enthusiasts. However, products bearing the new palmOne name will not appear until 2004. (Handhelds scheduled for release this fall will continue to bear the Palm name.)
This completes a difficult year-long process undertaken by Palm, Inc. (under the code-name "PalmSpring") to leverage the strong brand equity of the Palm name between the two post-split companies, PalmSource and palmOne. palmOne and other Palm platform licensees, such as Sony, will continue to refer to their devices as "Palm powered."
"Our brand promise is so well understood by the marketplace that the concept of 'One' in our new name was immediately compelling," said Ken Wirt, Palm Solutions senior vice president and head of sales and marketing. "'One' is a powerful addition to the instant brand recognition and identity of the Palm name."
Palm, Inc. began operations in 1992 as Palm Computing. It was co-founded by Jeff Hawkins, Donna Dubinsky and Ed Colligan. In 1995, while looking for investors to help it launch its first handheld computer, Palm accepted an offer to be purchased by modem-maker U.S. Robotics Corp. In 1996, with Hawkins and Dubinsky at the helm, Palm released the Pilot 1000 and Pilot 5000 handheld computers.
However, in 1997, 3Com Corp. acquired U.S. Robotics and Palm became a subsidiary. It wasn't long before Hawkins and Dubinsky felt stifled by the 3Com corporate bureaucracy and urged chief executive officer Eric Benhamou to spin Palm off as a separate company. He declined. Finding the arrangement untenable, Hawkins and Dubinsky left Palm in 1998 to form JD Technology, which later became Handspring, Inc. Colligan soon joined them.
In an odd twist of fate, 3Com spun-out Palm as an independent, publicly traded company in early 2000. And in 2002, Palm formed PalmSource, Inc. as a wholly owned subsidiary responsible for developing and licensing the Palm platform.
Finally, in 2003, Palm announced the acquisition of Handspring, Inc., bringing Hawkins, Dubinsky and Colligan back into the fold.