Palm Computing and Handspring (the two main Palm OS companies) are to merge. It's being portrayed as a merger, but reading between the lines, it looks like Palm is doing its level best to make sure Handspring (founded by the two people who originally set up what was to become Palm) doesn't go bust before it can be brought back into the family.
Palm Computing and Handspring to Merge
It seems a bit strange when a loss making company (Palm) buys a bigger loss making company (Handspring). What is it that Handspring has that Palm needs? OK they have more smartphone knowledge but the Treo has hardly set the world alight.
Perhaps they were worried about the only other manufacturer that solely used the Palm OS going bust. It may well put off other potential licensees and damage the reputation of the OS as a whole?
langdona (and others),
Palm's not bying a bigger loss making company.
Palm's share price is/was 10 times that of Handspring's (just looked & it was Palm USD14.50 and Handspring USD1.29).
Palm's market cap USD421,776,000 is over 2 times that of Handspring's USD192,790,000.
Palm's 2002 ended with USD300M in cash & USD100M loss. Handspring's loss for 2002 was "only" USD12.3M.
In addition Palm got a cash infusion from Sony this winter.
So, Palm has money, can afford to buy Handspring and gets "back" relatively cheaply skills & technology that "escaped" it when Handspring was founded.
And Handspring is/was not the only PalmOS licensee. Sony has licensed it for the Cli� PDA's. Samsung has licensed it for some CDMA phone models. Kyocera has licensed it for CDMA phone models (used to be Qualcomm's stuff, but sold to Kyocera). There might be also others I just don't remember.
So, it probably isn't that bad a deal, but time will tell & I prefer Symbian myself anyway. 😊
I don't wanna be a nitpicker , but langdona didn't say handspring was the only licensee, but that it was the only licensee that solely used the Palm OS. Sony, Samsung, Legend and Kyocera got a much broader product range, Sony and Samsung even use other mobile OS (Symbian, PPC). I'm not sure about garmin and tapwave, but they are not as "big names" as handspring. If palms "little brother" (comparable product range, both relying only on this single product range) would have gone bust that might have been a pretty bad industry signal (though i doubt that this was the main reason for the merger).
By bigger loss making, I did not mean that the company is bigger.
Just that its loosing more money than Palm, well relative to the total value of the company anyway. Handspring has never made a profit and Palm has been loss making over the last few quarters. As pointed out even Palm needed a cash injection from Sony to keep going, so spending money on another company that is also making a loss(nearly bankrupt) seems odd to me. There may be some overhead savings (job cuts were mentioned) but the cost of the merger and keeping Handspring going in the mean time ($10m to start with) is going to be a big drain on Palm's resources.
Never mind the markets seem to love the merge Palm up 19% yesterday 😊 Of course the markets always get technology stock right 😉
Sorry last post was by me 😉