Welcome back to the Deep Dive. Today we are doing
something a little different. We aren't just
looking at a company, we are looking at a specific
feeling. Oh, okay. You know that feeling when
you hold a piece of technology and it just, it
disappears. It stops being a gadget and it becomes
an extension of your brain. The flow state, yeah.
It's incredibly rare. It is so rare. And I want
to take you back to a time before we were all
doom scrolling on these glass rectangles for
six, seven hours a day. I want to go back to
the 90s, the era of the stylus, the era of the
little electronic beep. The era of graffiti.
And just to be clear for everyone, I don't mean
spray painting subway cars. No, not at all. We
are talking about palm. And look, if you're under
a certain age, you might see that little orange
logo on your LG smart TV and just think. What
is that? Right. Or you saw that weird tiny phone
from a few years back. Exactly. That little credit
card sized thing. But if you were around in the
mid 90s, the Palm Pilot wasn't just another gadget.
It was the icon. It was everything. It was the
iPhone before the iPhone even existed. It was
the device that proved to the world that we actually
wanted computers in our pockets. You know, it's
almost impossible to overstate the cultural gravity
of Palm back then. They didn't just make a successful
product. They literally defined the category
of mobile computing for an entire decade. For
sure. But the story we have in front of us today,
and this is all drawn from The really comprehensive
history of Palm Inc. spanning from its founding
in 92 all the way to its weird zombie -like existence
today. It's about so much more than just nostalgia.
Oh, it's a suck. It's a business thriller. It's
a tragedy. In some parts, it's a comedy of errors.
I was reading through the source material for
this, and honestly, it reads like a script for
a prestige TV drama. You have this scrappy origin
story in Silicon Valley. Classic. You have a
meteoric rise during the dot -com bubble. I mean,
we are talking about an IPO where the stock hit
nearly $100 a share on day one. Which is just
insane to even think about. And then, as is tradition
in tech, the inevitable crushing crash. A brutal
crash. Yeah. But it's not just the stock price,
is it? No, that's what makes it so fascinating.
It's the infighting. You have these confusing
corporate splits where the company basically
divorces itself right you get mergers that feel
like these really awkward family reunions and
then you have this truly tragic ending with hp
and a fire sale where they were selling their
flagship tablet for 99 bucks just to get them
out the door that 99 touchpad sale is uh it's
a moment that's just etched into the memory of
every tech enthusiast from that era but you're
right to really get it you have to look at the
entire arc the whole story we have to look at
the product lines, the Trio, which basically
invented the modern smartphone, the Pre, which
was supposed to save the company, even the Zyre.
Don't forget the Zyre. And we have to dig into
the corporate maneuvering, the stuff with 3Com
and Handspring. And through it all, we have to
answer this fundamental question. How does a
company that has the absolute best technology,
and spoiler alert, near the end, they really
did have the best mobile OS, how do they fail
to survive? That is the $1 .2 billion question,
isn't it? So let's set the stage. It's 1992.
The Internet is barely a thing for normal people.
Not at all. It's for academics and the military
mostly. Right. And if you have appointments,
you're writing them in a paper planner, a day
timer, a filifax. Thick, leather bound, heavy.
Yeah. If you lost that thing, your professional
life was basically over. Exactly. And into this
very analog world steps a trio that we should
probably call the trinity of handheld computing.
You have Jeff Hawkins, the founder, the real
visionary. The brain. the brain, Donna Dubinsky,
who is the business muscle, and Ed Colligan,
the marketing genius. These three, Hawkins, Dubinsky,
Colligan, they are the main characters of this
entire saga. They really are. And Jeff Hawkins
is such a fascinating character. He's not your
typical swaggering tech CEO. He's an inventor,
almost an academic, and he was obsessed with
neuroscience, with how the human brain works.
I read that he actually carried a block of wood
in his shirt pocket for months. He did, just
to get the size and feel of his ideal device.
right before they'd even built it. So he found
Palm Computing in 1992, but, and this is a key
detail I found in the notes, they don't start
by making the Palm Pilot. That wasn't the first
thing. No, not even close. Their first attempt
was something called the Zoomer. Even the name
sounds like it's trying way too hard to be cool
in the 90s, the Zoomer. It really does. It sounds
like a bad Saturday morning cartoon character,
but the Zoomer is so important because it was
a complete and utter disaster. Okay, so break
it down. What was it? It was a consumer PDA,
a personal digital assistant. But Palm didn't
make the hardware. Casio did. The watch company.
The watch and calculator company, yeah. Casio
made the device, and it was distributed by Tandy,
which owned RadioShack. Oh, RadioShack, okay.
And the operating system, the core software,
was provided by a company called GeoWorks, Palm's
role. They were just hired to run the PM software.
PMM, that's the personal information management.
So the calendar, the address book, the to -do
list. That's it. So just think about that structure
for a second. You have Casio making the hardware
in Japan. You have Pandy trying to sell it in
American malls. You have GeoWorks doing the underlying
OS. And then you have this tiny company, Palm,
doing the main apps on top of all of that. That
sounds like a classic too many cooks in the kitchen
scenario. I mean, who is actually in charge of
the user experience there? Nobody. And everybody.
And that was precisely the problem. The device
was slow, it was clunky, and the handwriting
recognition, which was supposed to be the killer
feature, it was terrible. Why was it so bad?
It tried to recognize your natural cursive handwriting,
but... The processors back then, they just couldn't
handle the variance. So you'd write lunch with
Bob and the Zoomer would interpret it as launch
with blob or something equally useless. It was
unusable. So the Zoomer hits the shelves and
it just flops hard. It didn't just flop. It was
a commercial catastrophe. And this is the moment
where most startups just die. Right. You launch
your one product. Nobody buys it. You run out
of cash. You close the doors. But Palm didn't
go under. Because they pivoted. And this is where
the story gets really interesting to me. Hawkins
looks at the wreckage of the Zoomer and realizes
they have to completely change tactics. But they
didn't have money to build a new device yet.
Not at all. So they looked at what assets they
actually had. They realized that while the Zoomer
itself was a failure, the synchronization software
they wrote, the code that let the device talk
to a VC, that part was actually really solid.
Ah, the sync. The sync. So they started selling
that as a standalone product called Palm Connect.
to other companies like hp for their devices
it kept the lights on but the real breakthrough
the big idea came from analyzing why the zoomer
failed it wasn't just that the hardware was slow
it was the input method correct hawkins had this
incredible epiphany he realized that trying to
teach a computer to read messy complicated human
handwriting was a fool's errand The technology
just wasn't there yet. So he completely flipped
the problem on its head. Okay. He thought, why
don't we teach humans how to write in a simple
way that the computer can easily understand?
And that is the birth of graffiti. Graffiti.
It's absolutely iconic. For the listeners who
are too young to remember this, we really have
to explain how weird and brilliant this was.
You didn't just write anywhere on the screen.
There was a specific little box at the bottom
of the display. Right. The silk screened area.
One side for letters, one for numbers. And you
had to learn a new alphabet. It wasn't hard,
but it was specific. It was a new way of writing.
It was a system of unistrokes. Single continuous
strokes for each letter. Think about a capital
A. Normally that's three separate strokes. You
go slant up, slant down, then the crossbar. Right.
In graffiti, the letter A was just upside down
V, one continuous stroke. The letter F was like
a backwards upside down L. By stripping away
all the complexity. The computer could recognize
the text instantly and with near 100 % accuracy.
It sounds like it would be a huge hassle asking
the user to basically learn a new language just
to use their calendar. But people did it. I remember
practicing my graffiti strokes. It felt like
learning a secret code or something. It did.
And because it was so reliable, you could get
really fast. You could take notes in a meeting
without even looking down at the device. It was
a true aha moment for human -computer interaction.
And they actually licensed the software out first,
didn't they? They did. They sold graffiti to
Apple for the Apple Newton message pad. Which
is just deeply ironic considering the Newton
was the big, expensive, over -engineered competitor
that Palm eventually crushed. Completely. But
the software wasn't enough. Hawkins knew that
if they stayed a software -only company, they
would always be at the mercy of hardware partners
who didn't get it. Like Casio with the Zoomer.
Exactly. That's the critical insight from the
Zoomer failure. Hawkins, Dubinsky, and Colligan
realized that if you want the product to be great,
you have to control the whole widget. You can't
just write codes for some brick that another
company designed. You have to build the hardware
and the software together so they sing in perfect
harmony. But building hardware is insanely expensive.
You need factories, supply chains, distribution.
They were a tiny software startup in Los Altos.
They needed a sugar daddy. Enter U .S. Robotics.
Now, when I hear U .S. Robotics, I immediately
think of that Will Smith movie, I, Robot. But
in the 90s, they were the absolute kings of modems.
That 56k dial -up screech, that iconic sound,
that was U .S. Robotics. They were a massive
connectivity company, and in 1995, they acquired
Palm. So that gave Hawkins the money he needed.
It gave the funding and the manufacturing expertise
to finally build his dream device. And then because
the 90s were just a wild time for corporate mergers
and acquisitions, U .S. Robotics itself gets
bought by 3Com in 1997. Right. So suddenly this
little startup. Palm is now a tiny division inside
a massive enterprise networking giant. Which
seems like a weird fit. A very weird fit culturally,
but it provided the financial stability they
needed to launch the product that changed everything.
The Palm Pilot. The Pilot 1000 and the Pilot
5000. Let's talk about these devices. They seem
so primitive now. They didn't have color screens.
They didn't play music. They didn't connect to
the internet. Why did people go absolutely crazy
for them? Because they respected the user's time.
That was the core philosophy. Hawkins wanted
it to be a companion to your PC, not a replacement.
It was designed to do a few things and do them
instantly and perfectly. And the hot sync button.
We have to talk about the button. The cradle.
The cradle was genius. You'd get home from work.
You'd put the pilot in this little plastic cradle
connected to your PC. You'd press one physical
button. And you'd hear that little bloop bloop
sound. That sound. And everything matched. Your
calendar on your desktop was now in your pocket.
Your contacts were updated. It sounds so trivial
today where everything is just magically in the
cloud. But in 1996, that was pure magic. It just
worked every single time. And the battery life.
It ran on two AAA batteries. Regular batteries
you could buy at any drugstore. store. And they
lasted for weeks, not hours, not days, weeks.
It was also instant on. You tap the screen and
boom, your address book was there. There was
no boot up sequence. It was literally faster
than finding a page in a paper planner. It was
a status symbol, too. I remember when the Palm
V came out a bit later, that anodized aluminum
chassis. Oh, the Palm V was gorgeous. It was
so sleek. It was cold to the touch. It didn't
feel like a toy. It felt like a piece of high
end jewelry. The Palm V was absolutely the peak
of that design era. It was beautiful. But here's
the crazy part. While consumers were falling
in love with these devices, the Trinity Hawkins,
Dubinsky, Colligan, they were completely miserable
inside the company. They were winning. They had
over 60 % market share. They were absolutely
crushing Microsoft's Windows CE devices. They
were winning, but they felt like they were suffocating
inside 3Com. 3Com was a big, boring infrastructure
company. They cared about selling Ethernet switches
and routers to corporations. They just didn't
understand consumer electronics. They treated
Palm like this weird, quirky side project. They
wouldn't give Palm the resources or the independence
it needed to grow as fast as the market demanded.
So it all came to a head, a confrontation. A
big one. Dubinsky and Hawkins basically went
to the 3Com board and laid it all out. They said,
spin us off. Let us be our own independent company.
And 3Com flat out... said no. So they walked.
In June of 1998, the founders, the people who
invented the product, the soul of the company,
they just stood up and walked right out the door.
That is a boss move. But they didn't just retire
to a beach in Hawaii. They did something incredibly
aggressive. Oh, yeah. They immediately started
a direct competitor, a company called Handspring.
This is such a crucial chapter that often gets
glossed over. They basically said, we're going
to build a better Palm than Palm. I loved the
handspring devices. They had those translucent
colored plastic cases, kind of like the iMacs
of the time. You could get them in blue or orange
or graphite. Totally. They were fun. But the
big innovation wasn't the color. It was that
slot on the back. The springboard expansion slot.
This is absolutely brilliant. The handspring
visor had this big slot on the back where you
could just plug in these hardware modules. And
you could get anything. You could plug in a GPS
receiver module. You could plug in a primitive
digital camera module. You could plug in an MP3
player module. I swear I remember seeing a module
that was a massager, like a little vibrating
massager that was powered by your PDA. There
were definitely some weird ones. But the most
important module, the one that pointed to the
future, was a cellular radio. They made a module
called the Visor Phone. Right. You plugged it
into the back of your PDA and boom, the whole
thing became a phone. That was the seed of the
modern smartphone era right there. So let's just
pause for a second and look at the landscape.
You have the original founders over at Handspring
innovating like crazy with these modules. And
you have Palm still stuck inside 3Com, just kind
of churning out slight iterations of the old
pilot design. 3Com must have been kicking themselves.
Well, if they weren't, the market was kicking
them. Investors looked at 3Com and said, why
are you holding on to this diamond? This is the
hottest thing in tech. The dot -com bubble is
inflating like crazy tech stocks are going bananas.
Everyone wanted a piece of Palm. So 3Com finally
caved. They had no choice. On March 1st, 2000,
they spun Palm off as its own independent publicly
traded company. March 1st, 2000. I feel like
I know where this is going. That date is etched
in financial history. That is literally the peak
of the dot -com bubble. The absolute. tippy top
of the peak and the IPO. It was pure madness.
It was mania. On the first day of trading, Palm
shares, ticker symbol Palm LM, hit an all -time
high of $95 .06. $95 a share for a company making
electronic calendars. To put that into perspective
for you, at that exact moment, Palm the spinoff
was worth more than 3Com, its own parent company.
That makes no sense. Gets crazier. For a brief
moment, Palm was worth more than General Motors.
A company making little plastic organizers was
valued higher than a company making millions
of cars and trucks. That is the very definition
of irrational exuberance. I remember reading
that people were actually buying shares of 3Com
just to get the Palm shares that were being distributed
and then immediately dumping the 3Com stock.
It created this bizarre negative value for the
parent company. It did. It completely distorted
the market. But, you know, gravity always wins.
The bubble burst. The Nasdaq crashed. And because
Palm was the poster child for this new mobile
tech bubble, it got hammered the hardest. How
bad was the fall? It was a complete free fall.
Within just over a year, they lost 90 % of their
value. 90%. By June of 2001, that $95 stock was
trading at $6 .50. Ouch. That is legitimate financial
whiplash. You go from being one of the most valuable
companies in the world to basically a penny stock
in 15 months. They were the worst performing
PDA manufacturer on the NASDAQ. And right in
the middle of this crash. The leadership at Palm,
remember, the founders are gone. They're at handspring.
They make a strategic decision that, in hindsight,
I think sealed their fate. The great split. They
decided to chop the company right in half. Right.
In 2002, they made the call to separate the hardware
business from the operating system business.
They created a new company called Palm Source
to make and license the OS. And the original
hardware company was eventually renamed Palm
Own. Okay, let's really unpack this. Why on earth
would you do that? The entire lesson of the Zoomer
was that you need to control both sides of the
experience. Why would they voluntarily unintegrate
themselves? It was pure Microsoft envy. You have
to look at the world in 2002. Who was the biggest...
richest, most powerful tech company on earth.
Microsoft. Microsoft. And what was their business
model? They made the operating system, Windows.
They licensed it to everyone. Dell, HP, Compaq,
Gateway. They didn't make the computers. They
just collected the rent on the software. So Palm's
executives looked at that and thought, we want
to be the Microsoft of mobile. They wanted Sony
and Samsung and Kyocera and even Handspring to
pay them a licensing fee to use the Palm OS.
Exactly. They thought the real money, the high
margins, were in the software licensing. not
in what they saw as the low -margin hardware
business. It was a logical thought process for
the time, but it was a fatal strategic error.
Because it created a massive conflict of interest,
right? It's a huge conflict. PalmSource, the
software team, was legally obligated to treat
Palm on the hardware team just like any other
customer. They couldn't share roadmaps. They
couldn't coordinate closely on new features.
They were legally separate entities. It slowed
everything down to an absolute crawl. It's like
if Ford split into an engine company and a car
body company and they were forbidden from talking
to each other, you'd end up with engines that
don't fit in the cars. That is a perfect analogy.
That is exactly what started to happen. Innovation
just stagnated. Meanwhile, while Palm was busy
fighting with itself, the founders over at Handspring
were struggling too. Why? They had great products.
They had great products, but they just didn't
have the scale to survive the brutal dot -com
crash. They were running out of money. So in
a twist fit for a soap opera, the two halves
decide to get back together. The reunion. In
October of 2003, Paul Moan, the hardware company,
acquires Handspring. And in doing so, it brings
Jeff Hawkins, Donna Dubinsky, and Ed Colligan
back into the fold. The Trinity returns. They
return. And they don't come empty -handed. They
bring a gift. Hansbring had been working on a
new type of device that would define the next
five years of mobile computing. The Trio. The
Trio, specifically the Trio 600. Now we are entering
the modern era. I had a Trio 650. I loved that
little brick. The Trio 600 was a complete revelation.
Before that device... Smartphones were these
weird, clunky, Frankenstein devices. They were
either a phone with a terrible tiny screen or
a PDA with a clunky radio bolted onto the side.
Right. The Trio was the first device to integrate
them perfectly. It was a great PDA. It was also
a great phone. It had that little stubby antenna,
which seems so retro now. And it had that full
QWERTY keyboard with the smile layout. The smile
layout. The keys were curved slightly upward
at the edges to mimic the natural arc of your
thumbs. It made typing on that tiny keyboard
incredibly fast and accurate. And it had a physical
switch on the top to silence the ringer. Which
the iPhone totally stole, by the way. 100%. The
Trio 600 and the 650 that followed were the absolute
gold standard. For a few years there, from about
2003 to 2006, if you were a business person,
a lawyer, a real estate agent, a techie, you
had a Trio on your hip. It was a BlackBerry killer
before BlackBerry really took over the corporate
world. But there was a ticking time bomb buried
inside that trio, the operating system. Right.
Remember the split? Palmone bought Handspring,
but they didn't buy back the software company,
PalmSource. PalmSource was still out there, an
independent company, just drifting. Okay. And
then in 2005, PalmSource got acquired by a Japanese
company called Access S. So wait a minute. The
operating system that runs the Trio, the very
heart and soul of the device, is now owned by
a completely different company in Japan that
has no real strategic interest in making sure
the Trio succeeds. Precisely. And not only that,
but the OS was getting really old. It was built
on code from 1996. It didn't support proper multitasking.
It didn't support modern networking protocols
well. The whole thing was being held together
with digital duct tape. And the hardware company,
which was now just called Palm again, they knew
this. They were desperate. They needed a modern
OS to compete. Desperate is the right word. And
this leads to what I personally consider the
biggest betrayal in the entire story. The TRIO
700W. The W stands for Windows. It still hurts,
just to say it out loud. In January 2006, Palm
released a TRIO that was running Microsoft Windows
Mobile. I remember watching the keynote address
online. They brought Bill Gates out on stage
with the Palm CEO. It felt like watching Luke
Skywalker join the Empire. It was just wrong.
Why did they do it? It was pure desperation.
Verizon, which was a huge carrier partner, demanded
it. Corporate IT departments were demanding it
because they loved Microsoft Exchange Server.
And Palm didn't have their own next generation
OS ready yet. So they had to do something to
stop the bleeding. They did. But it signaled
to the world, to their most loyal fans, that
Palm had lost its soul. They were now just another
hardware company pushing Microsoft's clunky software.
But secretly, steep in the labs in Sunnyvale,
they were cooking something up. They knew Windows
wasn't the answer. They knew the old Palm OS
was dead. They needed a Hail Mary pass. Enter
John Rubenstein. The podfather. The podfather
himself. John Rubenstein was the legendary hardware
engineering executive at Apple who led the team
that created the iPod. He left Apple, and in
2007, he joined Palm as executive chairman. And
he brought a lot of that Apple DNA with him.
He came in, looked at the absolute mess at Palm,
and basically said, we need to burn the ships.
We are starting over. We are building a brand
new operating system from scratch. And that incredibly
ambitious project became WebOS. This is the part
of the story that just breaks my heart every
time I think about it. WebOS. It was. It was
magnificent. It was so far ahead of its time,
truly. They unveiled it at the Consumer Electronics
Show, CES, in January 2009, along with the first
phone to run it, the Palm Pre. And the audience,
which was full of jaded tech journalists, just
gasped. I remember the river stoned it on. The
phone was the smooth, black, curved pebble. It
felt organic in your hand. But the software,
let's talk about the cards metaphor. This was
the genius of Matias Duarte, who was the design
lead they hired away from Danger, the company
that made the sidekick. Right. At the time, on
the iPhone, multitasking didn't exist. If you
pressed the home button, the app you were in
just closed. You could only do one thing at a
time. On WebOS, every app was a card. Like a
playing card. Exactly. You could have your email
open as a card, a web page open as another card,
and your maps open as a third. You could swipe
through them like a deck of cards. And to close
an app, you just flick the card up and off the
screen. Which is exactly how the iPhone and Android
work today. It took Apple and Google years to
copy that interface. Years. And they had Synergy.
That was another killer feature. WebOS automatically
pulled your contacts from Google, from Facebook,
from LinkedIn, and it merged them all into one
single profile for each person. Nobody else was
doing that in 2009. The height for the Palm Pre
was completely off the charts. The stock shot
up from $3 to over $18. Everyone thought they
did it. They're back. Palm saved the company.
But then the launch happened. June 6, 2009. The
fatal flaw wasn't the software. The software
was incredible. It was the business strategy.
They launched exclusively with one U .S. carrier.
Sprint. Sprint. I mean, can you hear me now?
Guy was Verizon. AT &T had the exclusive on the
iPhone. Sprint was the distant, struggling third
place carrier. It was a suicide pact. It was
an absolutely catastrophic decision. If you wanted
this amazing new phone, you had to switch your
whole family over to Sprint. And in 2009, nobody
wanted to switch to Sprint. The network just
wasn't great. And on top of that, the hardware
build quality of the Pre itself was suspect.
It was. There was something people called the
Oreo effect. Right, the slider mechanism. Exactly.
The phone was a vertical slider with a keyboard.
But the mechanism was wobbly. If you twisted
the phone in your hands, it felt like an Oreo
cookie sliding apart. The plastic felt cheap.
The keys on the keyboard were these tiny, sharp
little things. People reported they actually
cut their fingers. So it just felt cheap compared
to the solid glass and steel of the iPhone 3GS,
which came out at the same time. It did. So you
have this beautiful, futuristic software trapped
in a mediocre hardware body locked to a struggling
carrier. And they just ran out of time and money.
Completely. They burned through all their cash
reserves marketing the prey. The sales were just
okay, but nowhere near iPhone numbers. By early
2010, the stock was back in the toilet. They
were dead in the water and bleeding cash. They
needed a buyer. They needed a white knight to
ride in and save them. And who rides in? Hewlett
Packard. HP. The Titan of Silicon Valley. In
April of 2010, HP announced they were buying
Palm for $1 .2 billion in cash. And at the time,
this actually made a lot of sense to people.
HP was the world's biggest PC maker. They had
infinite money. They had global distribution
channels. And they said all the right things.
They said, we aren't just buying a phone company.
We are buying WebOS to put it on everything.
That was the scale argument. The CEO of HP at
the time, Mark Hurd, said we're going to put
WebOS on phones, on tablets, on netbooks, maybe
even on our printers. They wanted to create a
huge, unified ecosystem that could legitimately
rival Apple's iOS. It was a bold vision. So we
wait. A year goes by, 2011 arrives, and AGB finally
launches the new lineup of webOS devices, the
pre -3 phone, the tiny HP Veer phone, and the
big one, the HP Touchpad. The Touchpad was supposed
to be the iPad killer. It was the first and only
tablet. to ever run webOS. And it thudded. It
landed with a dull, sickening sud. The hardware
was just not good. It was chunky, made of this
thick, glossy black plastic that was a fingerprint
magnet. It was heavy. And the app store was a
ghost town. Right. No apps. All the developers
were busy making apps for iOS and Android, which
had millions of users. They didn't have the time
or the resources to write apps for a third platform
that had almost no users yet. The sales were
abysmal. I read a story that Best Buy was reportedly
refusing to pay HP for their inventory because
the touchpads were just piling up in the warehouse,
unsold. And this brings us to the villain of
our story, or at least the executioner, a man
named Leo Apotheker. He'd taken over as the CEO
of HP. He was a software guy from a German company
called SAP. He never seemed to care about hardware
at all. He looked at the balance sheet. He saw
the touchpad division losing money. And he had
zero patience for it. On August 18th, 2011, and
you have to get this timing, literally 49 days
after the touchpad launched, he pulled the plug.
49 days. That is just insane. Most companies
will give a new product a year, maybe two, to
find its footing and build an audience. He killed
it in seven weeks. Immediate termination. He
went on an earnings call and announced that HP
was stopping all production and sales of all
webOS devices effective immediately. He basically
lit $1 .2 billion on fire right in front of the
shareholders. But then the weirdest thing happened.
The fire sale. Because they had all these warehouses
full of these now -dead tablets, HP announced
they were dropping the price from $499 to just
$99 to liquidate the remaining stock. And complete
pandemonium broke out. I have never seen anything
like it. People were literally camping out at
Best Buy. Retail websites crashed under the load.
For a week, the HP Touchpad became the number
one selling tablet on Amazon, outselling the
iPad, but only after it was canceled. It proved
that people actually liked the device and the
software. They just didn't like it at the Apple
price point. It was such a bitter, tragic irony
for the WebOS engineering team. Suddenly, millions
of people were using their software and loving
it, right as they were all getting their pink
slips. And we should mention the community that
spurned up here. The homebrew scene for the touchpad
was legendary. Oh, the community was incredible.
Because HP had abandoned the device, the users
took it over. They hacked the touchpad to run
Android on it. They kept the webOS activation
servers alive for years through their own efforts.
There are people today who still have a working
touchpad in a drawer somewhere, running some
custom build of Android. It generated... so much
love. But the corporate suits just didn't care.
And Leo Apotheker, the CEO who made this call,
he got fired shortly after that, right? He lasted
less than a year as CEO. He destroyed Palm. He
oversaw a disastrous acquisition of a software
company called Autonomy that turned out to be
a massive fraud. He tanked HP's stock by 45 percent
and he got the boot. Meg Whitman came in to clean
up the mess, but Palm was already dead and buried.
So let's look at the afterlife. The body parts
of Palm were scattered to the winds after HP
was done with them. They were. WebOS, the software,
went on a very strange journey. HP eventually
sold the team and the source code to LG Electronics
in 2013. Which is why if you go to a store today
and you buy a high -end LG OLED TV, the smart
TV interface it's running is webOS. You're using
the great grandchild of the Palm Pre to watch
Netflix. And it's actually a great TV interface.
Those cards and the fluid navigation work really
well on a big screen. So that's the software.
What about the brand? The name Palm and that
little orange logo? That was sold off separately.
to a shelf company that was tied to TCL. TCL
is a huge Chinese electronics manufacturer. They
make TVs and they also make phones for other
brands like Alcatel and, for a while, BlackBerry.
And they tried to resurrect the Palm brand in
2018 with that tiny little phone, the Palm phone.
That was such a weird device. It was the size
of a credit card. It ran a modified version of
Android. But the marketing pitch was what was
so fascinating. They didn't market it as your
main phone. No, it was a companion to your big
phone, a phone for your phone. Right. The idea
was that you'd leave your big, distracting iPhone
at home. You'd take this tiny... Palm out to
dinner with you and you wouldn't be tempted to
scroll through Instagram because the screen was
just too small. It was trying to solve the problem
that the original Palm Pilot solved. Digital
complexity. But it was just too niche. And it
was exclusive to Verizon. They repeated the Sprint
mistake again. And it required its own separate
monthly fee. It just flopped. It really seems
like Palm was always cursed to be either Way
too early to a market or just slightly wrong
on the final execution. That's the recurring
theme throughout this whole saga, isn't it? Yeah.
They basically invented the PDA before the world
was quite ready for it. They refined the smartphone
right before the iPhone came and perfected it.
They even tried to do a digital well -being phone
years before people really started hating social
media. They were the Cassandras of tech. They
could see the future, but they could never quite
capitalize on it. So we've gone from the zoomer
to the pilot through the mania of the IPO, the
absolute stupidity of the split, the brilliance
of the trio, the tragedy of the pre, and now
these zombie years. If we have to distill this
whole epic story down to one key lesson for the
listener, maybe for someone running a business
today, what is it? I think the single biggest
lesson is about the danger of disintegration.
That great split back in 2002 is the moment that
I think put Palm on the path to ruin. You cannot
separate the soul of the product, which is the
software, from the body of the product, which
is the hardware. Not if you want to make something
truly great. Exactly. Apple understood this.
Steve Jobs was famously pathologically obsessed
with controlling the whole widget. Palm had that
model, and then they voluntarily gave it up because
they were trying to beat Microsoft in a world
that was rapidly moving toward Apple's integrated
model. It was a fundamental misreading of where
the industry was going. It's the difference between
a product designed by a committee and a product
designed by a singular, coherent vision. That's
it. When the Trinity was there, Hawkins, Dubinsky,
Colligan, they had that singular vision. Simple.
Fast. Fits in your pocket. When they left, and
after the split, that vision got diluted by committees,
by licensing deals, by carrier requirements,
by corporate politics. The soul left the building
long before HP finally shut the lights off. It's
a sad story, but in a weird way, it's also an
inspiring one. Because every time you swipe up
to close an app on your iPhone, or you see your
contacts merge on Android, you are using a little
piece of Palm's DNA. They may be gone. But they
are absolutely not forgotten. Their influence
is everywhere. And on that note, I think I'm
going to go on to eBay and see if I can find
a working Palm V for my desk. I miss that green
backlight. Just don't try to connect it to your
Wi -Fi. It probably won't end well. Fair enough.
Thanks for joining us on this deep dive. Always
a pleasure. Catch you in the next one.