Palm will divide into two separate arms--PalmOne, the hardware vendor, and PalmSource, the OS developer--"in late October," the company has said.
The company will also acquire handheld-device maker Handspring, which was created five years ago by Palm's original founders, Jeff Hawkins and Donna Dubinsky.
Palm employs a major cadre of ex-Apple people, with the corporate headcount said to comprise a third of former Apple employees.
Palm executives admit they learned from working on Apple's Newton personal digital assistant, which was discontinued in February 1998.
Ahead of Its Time
Two executives--PalmSource Vice President Business Development Albert Chu, and Senior Vice President Worldwide Marketing Gabi Schindler--spoke to Macworld about the lessons the company learned from Apple.
While at Apple, Chu was responsible for the Newton, which launched in January 1992. He said: "Newton was good technology. It had a lot of great features, but when we launched it, it was not launched as part of Apple.
"Yes, it was ahead of its time and was a great exploration, but it was just not ready for primetime: handwriting recognition did not work, for example."
Schindler, who was also involved in the Newton project, added: "It was a great personal information manager in and of itself, but it didn't connect to anything. It was a stand-alone thing and it just became another organizer."
Lesson Learned: Licensing
Despite its marketplace failures, the Newton attracted many converts. Some still use it today. Schindler said: "It showed there's a need for these devices. People loved it, people wanted it. I think that is what happens usually--there's a product, not necessarily the most successful product, but it shows the direction. And I think that's what Newton did, it clearly showed a direction."
She continued: "One thing we're doing at PalmSource is deliberately seeking licensees and making this into a truly open platform. With Newton and Mac OS, we weren't looking for licensees in a serious manner."
Chu and Schindler agreed on four key lessons they learned from their time at Apple which Palm has been able to apply in its dealings in the handheld space: open standards, the user interface, strong partnerships, and diversity.
While Palm OS could be construed as a proprietary system, becoming a developer couldn't be easier. Potential developers need only register online, download the software, and they can begin work, the executives agreed.
"With the Newton, we weren't interested in licensing the operating system, because we didn't have the experience we now have at Palm. If licensees are investing in your platform, you have a lot of responsibility to make their business successful in order to make your own business succeed," said Schindler.
"At that time, Apple was competing head-to-head with its licensees, which you shouldn't do. In terms of a business model we could later apply at Palm, we learned quite a bit at Apple," she agreed.
Apple began licensing its operating system to third-party manufacturers for Mac 'clones' in November 1994. The experiment ended September 2, 1997.
Licensees are critical to PalmSource, however: "Every licensee is very important to us. We work to make sure their software and hardware work well together. The result of that work is that we now have a wide range of diverse and innovative products, because they can innovate on top of the OS. This works because we want different devices; people want different things," Schindler said.
Apple's clone model required third-party manufacturers to stick to rigid designs. "We don't believe in that kind of model," Schindler said.
Apple and its Mac users remain important to Palm, said Chu. "We very much value the Mac user community," he said.
Palm's desire to maintain feature parity for users of Palm-powered devices despite their choice of platform is hindered by Apple's famed corporate secrecy. Chu described the hurdles faced by third parties tasked with keeping pace with Apple's fast-changing OS:
"Apple is very secretive with developers, and isn't revealing when the next OS releases are due to take place, or what's on the road map. This means we need to be reactive, not proactive. This is a lot harder for us to plan for because we're trying to get our platform to work with another platform.
"Apple's secrecy isn't helping us plan ahead, so if we knew, for example--and I certainly understand why Apple wouldn't want to tell us--that it would release on this date with these different features, then Palm can plan for that. But we just hear about it maybe the day before, whenever--and by that time, we can't come up with everything.
"I think in the end the customer ends up losing because of that," he said.
Looking to the Future
Chu added that in recent years, "Apple has done a tremendous job of getting a whole bunch of open standards to work with the Mac platform."
Looking forward, the PalmSource executives see critical trends that must drive the handheld industry: wireless connectivity, including Bluetooth and wireless fidelity; multimedia; communications; and data security.
Looking ahead, Schindler said: "I think that wonderful, usable, diverse and innovative devices are part of the future."
"I'm just curious myself where it's all going," she said.