How Palm Could Change Everything

Palm (Nasdaq: PALM  ) is scheduled to hold a press event Jan. 8 at the Consumer Electronics Show in Las Vegas, at which it is expected to debut its Nova smartphone operating system.

Call it D-Day. Time to do -- or die trying.

Over the next two days, I'll game out two ideas for what Palm's hopeful sunburst will be -- one, a game-changer; the other, game over. Let's begin with the game-changer, an idea that would allow Palm to make good on board member Roger McNamee's pledge to "transform the cell phone industry."

Be kind, rewind with me
Innovators zig as others zag. That's the challenge Palm faces, to do something that neither Apple (Nasdaq: AAPL  ) nor Research In Motion (Nasdaq: RIMM  ) nor Nokia (NYSE: NOK  ) nor Motorola (NYSE: MOT  ) has done or is doing now. I can think of one thing: handwriting recognition.

Handwriting recognition has vexed the industry for years. Only a few have made it work well enough to win customers. Apple tried with the Newton, which, in turn, birthed a series of non-starters such as Go's tablet computer. IBM (NYSE: IBM  ) was even in on handwriting recognition for a time. Microsoft (Nasdaq: MSFT  ) had it in a tablet PC version of the uncommonly durable Windows XP operating system.

We tend to forget  that where these others failed, Palm succeeded.

Surely I can't be the only one to remember the old PalmPilot and its Graffiti recognition system, can I? Graffiti set the Pilot apart because it was an easy-to-learn language, and therefore a better alternative to deciphering barely legible scribblings.

Record sales followed. Press reports from 1998 show that the PalmPilot captured roughly 66% of the market in its first 18 months of release. More than 1 million units were sold, five times more than what Apple's Newton sold in its entire history.

The PalmPilot remains a cult icon to this day, so much so that the Graffiti language persists. Software called Graffiti Anywhere makes the language accessible to owners of the latest Palm devices, including the hot-selling Centro and Treo smartphones.

Can there be any doubt that a breakthrough in handwriting recognition -- Graffiti 3.0, perhaps -- would lead to commercial success?

A better business in Palm's hands
Imagine what might be if Nova were a lightweight, touchscreen Linux OS with advanced handwriting recognition, a new Graffiti for a new era.

At the very least, it would unite Palm's product lines and make them more extensible. Consider the failed Foleo. Built on Linux by Palm co-founder Jeff Hawkins -- a tech Hall of Famer if ever there were one -- it was pegged as a "smartphone companion." Think of it as a lightweight netbook. Yuck.

Foleo also needed emulation to run Palm OS software, bringing into sharp relief the company's failure to create a well-integrated family of products built on a common platform. Nova is an opportunity to change that, to be like more like Apple, whose Mac OS X is the secret sauce behind both the Mac and the iPhone.

Nova could also resuscitate Foleo. This is what I mean when I say "extensible." Platforms always are. Here, a Nova-powered netbook would be set apart by Graffiti. So would a Palm tablet. Or a new Treo. And each device would be interoperable with the others, because they'd have been built using common interfaces to the Nova OS.

There's a market for this. Palm's new Software Store already hosts 5,000 applications, and Linux is a popular OS with coders. Nova just has to be novel and have good tools for developers to work with. Handwriting recognition could supply the novelty; Palm will need to supply the tools.

But will it? I hope so. If our 125,000-strong Motley Fool CAPS community is any indicator, and it usually is, this is Palm's last shot at survival. Nothing less than a game-changer will do:

Metric

Palm

CAPS stars (out of 5)

*

Total ratings

808

Bullish ratings

461

Percent bulls

57.1%

Bearish ratings

347

Percent bears

42.9%

Bullish pitches

93

Bearish pitches

82

Data current as of Dec. 29, 2008.

D-Day is less than a fortnight away, Palm. You've got till then to show us something brilliant. If you don't, then it's likely game over. And none of us wants that.

Apple is a Stock Advisor selection. Microsoft and Nokia are Inside Value picks. Try either of these Foolish services free for 30 days. There's no obligation to subscribe.

Fool contributor Tim Beyers is a member of the Rule Breakers team and had stock and options positions in Apple and stock positions in IBM and Nokia at the time of publication. Check out his portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. Its disclosure policy isn't here right now. Please leave a message at the tone. Beeeeeeeeeeep.


Read/Post Comments (6) | Recommend This Article (9)

Comments from our Foolish Readers

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  • Report this Comment On December 29, 2008, at 6:07 PM, conradb212 wrote:

    Hard to remember now that Palm once ruled the handheld industry and that it seemed unthinkable anyone would ever catch up. But that was before the handheld industry decided all handheld devices had to be phones as well and thus handed the platform over to the clueless telcos. And, of course, before Jeff Hawkins lost interest and dedicated himself to brain research instead.

    As for history, Go preceded the Newton and not the other way, Microsoft was in tablets way before XP with its Windows for Pen Computing that effectively killed the one true pen OS, PenPoint, and Graffiti remains readily available in the form of the "Block Recognizer" in almost every Windows Mobile device. And Transcriber, also in almost every Windows Mobile device, began life as the recognizer in the Newton; Microsoft got it when they bought certain rights to ParaGraph's work, just like Windows Journal is really the aha! ink processor of circa 1994, which Microsoft also bought. And yes, IBM was heavily into pen tablets (the ThinkPad was a tablet) and reco.

    Personally, I think Palm's moment in history came and went. Ed Colligan's remaining empire is just too small to ever make a difference again. Graffiti on Linux would be nowhere near enough.

  • Report this Comment On December 29, 2008, at 10:29 PM, nathanb131 wrote:

    I really don't see how handwriting recognition is relevant to handheld devices now that hard (Treo) and soft keyboards (iPhone) work so well. If I'm going to reach in my pocket to make a note that I need to pick up milk from the store I can do it very quickly with ONE HAND with my Treo. To use a graffiti input for something like that would be far more cumbersome and time-consuming.

    The only reason I would see a need for handwriting recognition is for mid-range notes....To me there are 3 kinds of information I need to 'dump' out of my brain at any given time:

    1. Short little ideas and reminders that are best TYPED as quick memos and lists in my smartphone.

    2. Lengthy writing will happen on a full-size keyboard because that's way faster than I can handwrite.

    3. Brainstorming sketches of ideas, mindmaps, meeting notes etc that I'd really want free drawing abilities for... and for this only something the size of a tablet PC would do anyway.

    I'm not even sure I'd WANT my notes to be translated into ASCII or whatever if I had the choice. Those types of things I'm likely to want to clean up and re-write (if worth preserving at all) into some better archive than a 2D picture. I'd rather have a superior PIM be able to embed attachments of my quick little brainstorms that require a sketch-note combination to get the idea across. I want to preserve the spirit of my original thought than to have bloated software try to translate my chicken scratches with mixed results. I suspect OneNote from Microsoft came pretty close to this ideal if only TabletPC's were cheaper, more rugged, and had that 'instantly on' response that I get with my smartphone.

    I'm on my 3rd Treo and love the Palm OS simply because it is FAST, relatively stable, and completely customizable thanks to those 5,000+ aps . There really isn't more I could ask of my Palm Treo that I'd want in a handheld device. Seriously, unless you spend a large part of your day on public transportation or on airplanes, what is the advantage of watching widescreen movies on a small screen? I've got access to laptops, pc's, tv's for 90% of my waking hours and I'm sure that's the case for most of us.

    My Treo is an extension of my brain. It's where my ideas go to be stored for future retrieval. It's got all the things in my life that I need when I need it that I don't want to think about so I'm free to be creative. Yes it also entertains me with games, video, music, surfing, etc, but is definitely not my first choice for any of those things if a larger screen is nearby. Sure, the iPhone's screen is better, but surfing the web for any real length of time or watching movies will never be a good use of time on anything smaller than a netbook.

    I'm anxiously awaiting Palms 'newness'. I hope they keep with the spirit of being a pioneer of 'brain-extension' devices. I will be disgusted if they just follow suit in the 'best-browser-experience-in-your-hand' contest that Apple got everyone to chase.

    If they do no more than upgrade garnet into a more powerful OS that is backward compatible with the Garnet aps and squeeze it into the TreoPro form factor, I will be satisfied. If they come up with a bloated OS that plays video, browses the web, and gives turn by turn directions at the same time AT THE EXPENSE of responsiveness... I will pass, WinMo's got that covered already.

    If they show a TabletPC/Newton/Foleo device that is powerful, quick, and instantly on, I will be very interested. We've all been waiting for Apple to unveil the perfect tablet ever since Microsoft started pushing that form factor.... maybe Palm is where that breakthrough tablet will come from?

    To me, the Treo is the perfect form factor as an always-with-me companion to store and retrieve quick info.... If that is nicely updated and married to a tablet computer that is the a great idea and brainstorming assistant... then THAT combination would be the secret sauce.

    Apple should have been there by now. The Newton was ahead of its time. Then with the smashing success of the IPOD they decided to become a media-centric hardware company, catering to those masses who want to be constantly entertained with ever sleeker ways to look at eye-candy in their hand.

    I don't need better ways to be entertained. I want a better way of processing information and making sense of it all to help me live a more enlightened life. Computers should help us free up our minds to be creative, not pacify us with mindless entertainment.

    Palm, don't forget what made you great in the first place, go where no one else is going and give us a better way of processing thoughts... don't give us the next 'iPhone killer'.

  • Report this Comment On December 30, 2008, at 1:21 PM, kfife wrote:

    I have to partly agree with nathanb131. I really love my Treo 680 but I would QUICKLY choose a different platform if any other platform (iPhone, RIM, G1) gave me the same USEFUL and MATURE applications that I STILL get from my PalmOS right now.

    While accelerometers are neat, and the ease of the app store makes iPhone app installation FINALLY accessible to 'Grandma' AND geeks ('Grandma' never could figure out how to install apps on the PalmOS), there is still no device out there that is a phone combined with what I would consider to be a true PERSONAL INFORMATION MANAGER.

    I think of the iPhone as a phone with emphasis on an awesome media player, browser, app installer. I think of the RIM devices as a phone with emphasis on written real-time communication. BUT I THINK OF THE PALM as the one and only device with an emphasis on managing personal information. With it I can create elaborate task outlines using the Bonsai outliner, I can create JOURNALS of the zillions of bits of information I come into contact each day into searchable blob (OR neat hierarchy). I can get all of my my passwords from a single ENCRYPTED LOCAL REPOSITORY on the device (fat chance I'll be pushing my lists of PASSWORDS and bank account numbers up to the 'cloud'), I can get all of my most important information while I am off-net in rural Puxatony, or down in the subway. It's great. Nobody else offers that. Seriously. Nobody else has that... YET.

    YES, I AM IN FACT pulling my hair out with desire for a half-decent browser, a WIFI connection on my device that doesn't cause the device to crash (sorry T|X, you kinda sucked that way), and powerful/stable enough platform to make a working and reliable SOFTPHONE a reality, allowing connection to WIFI, 3G, 4G, WiMax... whatever new air interface emerges as the next dominant standard.

    Palm doesn’t have to be the iPhone. But it does have to be a good phone. The author is right. This is their last chance. If they don’t reinvent themselves this time, my assertions about the Treo and PalmOS will soon stop being true as the newbie’s in this space mature, in the niches that palm now excels in.

  • Report this Comment On December 30, 2008, at 3:54 PM, scottmcfool wrote:

    I agree with kfife in that I'm not sure how important the capabilities of the OS are. Palm will only succeed if the hardware/device is the best it can be. There really isn't too much missing in the current Palm OS, the problem is that the Treo does not have all the features that users want in the one package these days.

  • Report this Comment On December 31, 2008, at 12:16 AM, differential wrote:

    I think the author's point is valid. Handwriting recognition can indeed be a significant differentiator for Palm. I find my Palm T/X with stylus and Graffiti 2 a very natural way to enter data quickly. It's not perfect, but its the best I've seen so far.

    I am convinced that excellent HWR, is one of the key attributes, along with seamless backward compatibility with legacy Palm apps, that could differentiate a Palm smartphone. It could also be a key differentiator for a larger UMPC/netbook/clamshell/Foleo II, slate, or tablet formfactor device that is truly instant on/off, acting more like a PDA than today's notebook computer.

    Killer HWR (and hi-res, responsive (ie. no lag) freehand sketching) could be a key component in carrying forward the "Zen of Palm" philosophy in Palm products and truly advancing the mobile computing experience once again.

    Palm has a real chance here to win hearts and minds.

    An interesting related thought -- Could it also be that Jeff Hawkins isn't as distant from Palm as we are lead to believe? Hawkin's and Dubinsky's Numenta could well be providing key elements of an improved handwriting recognition system for incorporation into Nova. HWR would seem to be a suitable application for HTM. Arguably, the technical talent pool Palm has collected in the last two years under the leadership of Jon Rubinstein should not be underestimated in its own right. If the Hawkins/Dubinsky team are also actively collaborating, all the better.

  • Report this Comment On December 31, 2008, at 1:49 PM, nathanb131 wrote:

    To second kfife, I don't believe another smartphone exists in the market that does what my Treo does in the way I want to do it. Blackberry, iPhone, WimMob, and Android ALL have an increasing pool of 3rd party apps for total customization but each falls short in true PIM useability.

    On any of those devices how fast can you take it out of your pocket and note that To-Do that just popped in your head? Then be able to instantly switch to your threaded SMS's, email, calendar, contacts with the press of ONE button... and yes you can do it while in a phone call or listening to music....

    They are all missing something. iPhone doesn't have that hard-key flexibility and responsiveness. Twice as long to enter that To-Do or appointment than on Treo? To me, convenient PIM is MOST important in a handheld device. Entertainment, secondary. Android has the keyboard but you have to flip it open with two hands before you can even start typing by the time Treo user has shot off an SMS and put it back in her pocket. Blackberry... I love how they focus on efficiency of use and responsiveness... but for email, not PIM... and the lack of touchscreen means 3rd party apps don't have as much potential for efficiency as Treo ones do (even though many developers don't effectively utilize the powerful combo of touchscreen/keyboard).

    How does iPhone NOT have a cut and paste option? That's a CORE feature for any device meant to be a PIM. They aren't even the same species. One is a PIM with an integrated phone, the other is a pocket media player with an integrated phone. They should come up with a new category. iPhone is a funphone, Treo is a smartphone.

    The only other device that would do pretty close to what I do with my Palm Treo is a Win Treo... and the ONLY reason I've considered switching is new software. WinMob has finally passed Palm in it's library of quality aps available... which is really sad, I have $100's invested in Garnet aps that I use every day. They load instantly and are very responsive. Not something I'd say if I used them on WinMob.

    Palm is perhaps the last simple but robust OS. I really hope it gets properly updated with the same PIM-centric philosophy and that all the major developers jump back on board.

    If not then I will have to swich to WinMob sometime next year. That's what Jan 8th will be about... those of us that have been sticking with garnet while watching it's ap development fade away... we are ready to jump, but are giving Palm the benefit of the doubt.

    Show us you want to reclaim that best-of-PIMs spot that you let slide away and we will support you.

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