Handspring CEO battles best-in-breed thinking

TORONTO — In the early days when she was developing the Palm Pilot, Donna Dubinski and her colleagues created a cardboard wheel with a rotating paper arrow in its centre.

On one side of the circle were the words “”A Pipe Dream Driven by Greed.”” On the other were the words, “”The Mother of

All Markets.”” These were based on former Apple CEO John Scully’s and Intel chairman Andy Grove’s respective evaluations of the handheld market’s potential. Dubinski called this device the Handheld Market Indicator, and depending on how well the day was going, she would turn the arrow to one side or the other. In her keynote speech at Comdex Canada 2002 Thursday, the founder and president of Handspring said she was ready to start spinning it again.

“”It’s the same thing today,”” she said. “”I hear some people telling me it’s never going to happen, other people tell me (the handheld market) is going to take off tomorrow.””

Dubinski, who spent three years trying to convince 3Com to spin off Palm before leaving to start up Handspring, outlined a number of challenges facing the wireless device market. These include working with network operators whose own businesses are in turmoil, product performance glitches and a lack of roaming agreements for data services in North America. On the flip side, she described handhelds as a natural progression from mainframes and PCs, pointing to Handspring’s own Treo communicator as a prime example.

Based on the Palm operating system, the Treo combines features of a cellphone, a handheld organizer and a Research In Motion-style always-on e-mail pager. The most recent version, the Treo 90, includes a keyboard and colour screen. Dubinski acknowledged that the three functions of the Treo might not offer the kind of best-of-breed quality of separate products, but she argued that mobile users have different needs from desktop users. She compared the handheld to a stereo system, where separate speakers might offer better sound but would be too cumbersome to carry around jogging. A boombox or walkman, on the other hand, serves users appropriately.

“”We’re not the smallest device out there or the thinnest thing out there,”” she said, showing a slide that lined up the Treo next to cell phones and other PDAs, “”but we’re at the range of a mid-sized phone. That makes a big difference when you’re mobile.””

Handspring began as a competitor to Palm in the consumer space with its Visor handheld, but Dubinski said its concentration on the enterprise has shifted development focus away from the Visor. “”We decided it was better to take a shot at a leadership position in one market, rather than settle for being a sure number 2 in another market,”” she said.

Though the Treo has been out for less than a year, Dubinsky said it has taught Handspring a lot about changes in the marketplace. In particular, she said she’s learned network operators are huge organizations that are busy enough trying to stay profitable without the added complexity of supporting devices like the Treo. “”It’s very hard to generalize about the operators. Each one is a bit different and you have to structure your relationship with them individually to meet their needs,”” she said. In Canada, Handspring works with Rogers AT&T Wireless.

While a Yankee Group in Canada study earlier this year suggested there was little demand for applications like short message service (SMS), Dubinski said interest would come once handheld interfaces are improved. Handspring had surveyed users about their input preferences. Initially, about 60 per cent said they preferred a keyboard, while 40 per cent opted for the writing technology based on Palm’s Graffiti application. Since the device has hit the market, however, Dubinski said the split is more like 80/20. That’s partly because typing allows people to work with one hand, while the other holds a coffee, for example. It also allows thumb typing.

“”We call it SMS for adults,”” she said. “”Until now it’s been completely kid-based (in Europe and Asia) because they were the only ones willing to enter text. By making it easier to use we will go a long way.””

Handspring expects to ship a CDMA version of the Treo 90 this quarter, Dubinski said, but issues surrounding dual-band issues have left Canadian launch plans in limbo. Palm has also held off on launching the Palm VII in Canada so far.

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