Palm: Size Matters
Like Research in Motion, Palm won customer loyalty with its earliest innovation: the Palm Pilot, an easy-to-use handheld organizer. But as wireless technology grew up, so did the demands of Palm's customers.
Some applaud Palm for improving on growing pains, like making its keyboard easier to use. But others say hulking competitors like Hewlett-Packardand the small screens of Palm's Treo devicesare loosening the company's grip on their loyalty.
Doctors at St. Vincent's Medical Center, a Bridgeport, Conn., hospital, carry Palm Treos loaded with software that helps them access patient records and treatment databases. But for Gary Weiner, the hospital's chief information officer, the Treo's screen size is a "big drawback ... The real estate of the user interface is really difficult when you're designing applications."
Mike McCleery, vice president of technology with UnumProvident, agrees: "There's only so small you can go before you lose functionality." The Treo 700w's screen is 2.5 inches diagonally, compared with the 3-inch HP iPaq hw6500. In response, Joe Fabris, Palm's director of wireless markets, says the Treo screen size is in the "sweet spot" for readability while fitting on a phone-size device.
McCleery says making calls and typing on the Treo are easy, though he adds that the keyboard was poorly designed and harder to use in earlier devices. He also favors the Treo because it has a longer battery lifea full workdaythan that of its competitors.
Kelleher Corp., a producer of lumber and moulding products in San Rafael, Calif., bought Treos as part of an order-management system overhaul in late 2003. Paul Herzog, vice president of marketing, says the Treo 650s featured a user-friendly interface and superior phone functionality.
Chris Fryer, director of information technology and communications with San Francisco law firm Hanson, Bridgett, Markus, Vlahos & Rudy, went with Treos because many of the firm's attorneys were accustomed to using Palm Pilots.
He likes the smaller screen and says the device has a faster processor than some competing products. However, according to Fryer, Treo 600 and 650 modelswhich run the Palm OS operating systemsometimes don't display document attachments. (Palm says document-viewing software from DataViz is preinstalled on the 650 and 700 models.) Overall, Fryer says he's satisfied with the Treo, but is keeping his options open: "They're goodthey're not the best, but they're good."
Palm Operating Results*
Total assets - $1.41B
Stockholders' equity - $937.50M
Cash and equivalents - $131.64M
Short-term investments - $404.63M
Long-term debt - None
Shares outstanding - 102.07M
Market value, 4/20 - $2.35B
** As of Feb. 28, 2006, Except as Noted