.KEYWORD yankowski
.FLYINGHEAD PALM PLANS
.TITLE A vision of Palm’s future
.OTHER
.SUMMARY PalmPower Magazine Contributing Editor Michael Compeau had a chance to catch Carl Yankowski’s keynote address at the Product Development Management Association Y2K Conference. In this article, Mike provides an exciting summary and analysis of the plans Yankowski revealed for Palm’s future.
.AUTHOR Michael Compeau
I can’t write this article without coming clean: I’m not a journalist. No, really. For the past six or seven years I’ve been employed in the "product development" field. The field is distinct from engineering because of the level of marketing theory that permeates it. Notwithstanding that, many "purist" marketers frequently scrunch up their noses at the discipline. After all, the field’s adherents generally get far more kicks from listening to customers and changing their product to suit them than from listening to customers in order to craft a clever ad campaign to move the tired old product already on the shelf.
Naturally, I’m interested in how companies come up with ideas for products and how they attempt to understand the customer requirements and latent needs in order to develop and commercialize them. This leads me to a fascination with many products, chief among them being handheld devices. So, naturally, I experience plenty of excitement when I hear of new Palm or Palm OS-based devices being released or even just hinted at.
As a result, I was more than just a little tickled to be able to attend my professional organization’s annual PDMA (Product Development Management Association) Y2K Conference held the third week of October in New Orleans. There, I had the chance to hear Carl Yankowski, CEO of Palm, Inc., deliver the opening keynote address on Palm’s future product plans. He’s pictured in Figure A.
.FIG A Carl Yankowski, CEO of Palm, Inc.
.H1 Carl speaks: "We have a plan"
There’s been no small degree of conjecture in the Palm device-user community over the past year about the future viability of Palm in the face of strengthening competition from Microsoft’s Pocket PC and the growing strength of Symbian in the ubiquitous cellular phone market. A significant number of journalists and handheld enthusiasts were fairly disappointed in the past few product introductions by Palm; we’ve been patiently awaiting some sort of "killer" product revision that would change all the rules again and re-establish Palm’s claim to the gadget geek’s trophy.
Instead, most past products have been viewed as largely single-attribute incremental improvements. The Palm V and Palm Vx gave us a lean, sexy industrial design, but without too many enhancements to the basic feature/function list. The Palm VII added sparse geographic coverage for wireless connectivity in a larger form-factor, again with few real enhancements. The Palm m100 was simply a Honey-I-Shrunk-the-Palm-III model; and the Palm VIIx finally added the memory that should have been in the Palm VII from the start. Many in the enthusiast community were wondering if Palm still possessed the "chutzpah" to create real innovation in the market space, as opposed to throwing out incremental changes that rested on past laurels. So where’s the "Palm plan?"
Well, it’s out in the open, now. With a recent video snippet on CNET (at http://news.cnet.com/news/0-1006-200-2895018.html) that was probably poured over more than any other past messages coming out of Palm, Carl Yankowski shared a glimpse of the future. In the recent PDMA keynote, Carl, an avid aviator and instrument-rated aerial acrobat, expanded on those fleeting CNET references and took the audience through his loop-the-loop product roadmap via a PowerPoint presentation.
.H1 Coming in 2001: "The world in every Palm"
Carl was clear about the switch in focus. In the past, Palm had deliberately and carefully pushed a marketing message stressing the ubiquitous need for the "connected organizer." "A Palm in every hand," was how Carl typified this pre-Y2K approach. This year, the focus has switched to increasing the breadth of functionality of the device through the "associated services" angle embodied in Palm.Net and coming wireless products. Think "wireless services". Also, there’s good news for gadgeteers: Carl says we can expect device prices to plummet drastically, as competitors, hungry for market share, pressure commodity pricing, and the increasing value of wireless services changes the business model in the direction of the old Marketing 101 razor/razorblades analogy.
Since Carl was delivering the same content he had recently presented to Salomon Smith Barney on Wall Street, we got to hear some of the numbers, too. Sales projected for Q4 2000 are 1.5 million units. Inventory turns at 32 per year. For those of you who aren’t familiar with the concept of an inventory turn, it means how often a company’s inventory is replaced. A general rule of thumb is, the more inventory turns, the less obsolete inventory becomes and the more healthy a company. 32 inventory turns per year indicates that Palm expects to completely clear out and replace inventory every week and a half, or so. The annual revenue run-rate expected at year-end is $2 billion. As Carl noted, "We’ve got the tiger by the tail."
.H1 Why Palm thinks they’ve succeeded
As users, we’ve all got our own understanding of the value of our favorite electronic companions. We know what they do for us. We know what we wish they could do, and what we’d like to change. So what does Palm think? Reassuringly, they seem to be giving this some solid consideration. Carl’s primary comment in this area was that Palm is successful precisely because they didn’t take on too many technical challenges at any one time. "We’ve stuck to our knitting", Carl remarked, "It is our ability to keep technology transparent that will keep us on top."
Additionally, and perhaps notably for PalmPower’s Enterprise Edition audience, Carl also threw out a zinger: "How do we do it? By trying not to listen only to the geeks." He added with a chuckle, "That’s tough, though. We’ve got 450 engineers we pay to try to keep things simple. And, after all, I’m probably the biggest gadget geek of them all!"
Then there’s the whole word-of-mouth phenomenon related to Palm. As the hands went up around the room indicating device ownership, it was clear that 2000 was the year for Palm. At last year’s PDMA conference, I ran into half a dozen Palm users. This year, I’d guess that from 15-20% of the attendees already owned one. And the buzz around the tables at the conference session breaks was evidence of the way this growth occurred.
Jeff Hawkin’s unobtrusive little operating system stays out of your way so you can just do what needs to be done. And simple is easy to understand. In a complex world where we’ve come to worry about POP3 accounts, DNS names, USB hubs, conflicting COM ports, and "cookies" stealing privacy, "simple" sells. And, of course, free spoof advertising on Late Night with David Letterman never hurts either!
Speaking of Palm’s success, Carl also referred to the recent Palm m100 launch as "the largest launch ever." Impressively, the product designed to target the student segment hit dead on. Some 90% of this fall’s buyers had never owned an electronic organizer (that means Palm believes they truly hit the "incremental growth" sales curve, rather than cannibalizing existing model sales), and the vast majority of the buyers were, in fact, college and high school students.
.H1 Growing stronger
Palm acknowledges that the recent movement of handheld computing solutions into the enterprise environment will bring increasing requirements on processing capabilities and demand the raw power that new CPUs like the StrongArm processor will provide. Carl said we can expect to see StrongArm "in the next generation." It was apparent Palm believes any technical advancements that can be made transparent to users should be incorporated as soon as they’re viable.
Bluetooth products will be on their way, as will "always on" RIM Blackberry-style server-synchronized email functionality (by the second quarter of 2001, according to Carl). Telephony "sleds" for the Palm V family will be arriving in the coming months. Yankowski noted, again, the recent announcement of Palm’s plan to start on a clean sheet of paper with Motorola in order to create a new device that will define the convergent category between cellular telephones and electronic PIMs.
Palm’s development model is illustrated by the following outline for successive platform development, originally shown on a PowerPoint slide as a series of circles of growing circumference linked from the lower left of the screen to the upper right:
.BEGIN_LIST
.BULLET PIM: the "connected organizer" platform where the original PalmPilot began;
.END_LIST
.BEGIN_LIST
.BULLET Web PIM: sharing key information with others, such as coworkers, spouse, family, friends, etc. Think AnyDay.com and Internet connectivity;
.END_LIST
.BEGIN_LIST
.BULLET Communication Level I: universal email and server sync (what "wireless" enables);
.END_LIST
.BEGIN_LIST
.BULLET Communication Level II: voice recognition telephony. This sounded like it was sometime off, perhaps 18 months away;
.END_LIST
.BEGIN_LIST
.BULLET Security I, Identification: non-monetary, secure data banks, such as drivers licenses, company ID information, etc. to make folks comfortable with the security level provided and accustomed to use of a device as the data bank;
.END_LIST
.BEGIN_LIST
.BULLET Security II, Digital money and eWallet solutions: "pay anybody anywhere with your Palm device" vision growing far beyond the recently abandoned PayPal for Palm idea and involving early talks with Visa and MasterCard.
.END_LIST
The plan Carl laid out sounded like it would probably stretch over the next five years or so. He commented on the need to move attention from "e-commerce" to person-centered "me-commerce" in which the device and the empowering services have a vital role to play. Palm has clear plans to not only push for adoption of the Palm operating system itself, but to intertwine their future with others through partnerships with leading firms such as Nokia, Motorola, and Sony. Add their wireless services ambitions to the mix, and it’s easy to see that there will be some more exciting things to come.
Seeing the vision set out with an organized, logical plan for the company’s product and services mix was compelling. I came out of the presentation with a far more positive feeling about the few Palm shares that I bought six months ago. As a handheld enthusiast it was exciting to hear the vision Palm is building toward.
And Carl’s closing comment? "Think simple, elegant, transparent technology. We’ll be there." I can hardly wait.
.BEGIN_SIDEBAR
.H1 Product availability and resources
For more information on the Product Development Management Association, visit http://www.pdma.org.
For more information on the Product Development Management Association Y2K Conference, visit http://www.pdma.org/2000/.
For Carl Yankowski’s "What’s next for Palm?" video on CNET, visit http://news.cnet.com/news/0-1006-200-2895018.html.
For more information on Salomon Smith Barney, visit http://www.smithbarney.com.
.H1 Bulk reprints
Bulk reprints of this article (in quantities of 100 or more) are available for a fee from Reprint Services, a ZATZ business partner. Contact them at reprints@zatz.com or by calling 1-800-217-7874.
.END_SIDEBAR
.BIO
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