November 6, 1998 9:00 AM PST

PalmPilot creators form new firm

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Jeff Hawkins and Donna Dubinsky, founders of handheld computer giant PalmPilot, have landed on their feet at their new venture, Handspring.

Handspring has already attracted much attention by industry watchers, along with rumors and speculation about what products will come from the brains behind the ultra-successful PalmPilot handheld computer.

"They are hinting that they are going to try and create new reference designs that would take advantage of the Palm OS," said Tim Bajarin, president of Creative Strategies.

Although initial designs are likely to revolve around the handheld and mini-notebook form factor, Bajarin thinks that given the company's focus on appliance-like devices, other more experimental designs could be in the works.

"The charter [for Palm Computing] is to continue making a better palm PC. While this is a hit, 3Com may have to try six to eight other reference designs before they find the next hit. I don't think 3Com has the stomach to finance that kind of development, which may be why they allowed [Handspring] to be spun out," Bajarin said.

Dubinsky and Hawkins, who created the original PalmPilot computer and founded the Palm Computing company, left 3Com, the company that eventually bought Palm Computing, about five months ago. Until now, the duo has kept much of their business plans for a new company under wraps. Handspring now says it expects to introduce products at the end of next year.

The new company has licensed the Palm operating system (OS) for use in future handheld computing products, but the company is by no means interested in creating PalmPilot clones, said Jeff Hawkins, chairman of the board and chief product officer for Handspring.

"Clearly, one of the reasons we want to use the Palm OS is that we want to be compatible with all the developers, all the stuff that is happening with the PalmPilot," Hawkins said.

"We want to be part of that community, but we will be differentiated," he said, declining to comment on how this differentiation might manifest itself in product design.

But Handspring is not keen on using Microsoft technology--at least not initially.

"Our license is not exclusive...we don't have to build only Palm devices...but we want to build really successful products, and using Windows CE, I don't think I can build really great products."

Despite the recent influx of devices based on Windows CE and the increasing popularity of PalmPilot devices, Hawkins believes Handspring has a chance at gaining a share of the emerging handheld market.

"This is very early on in this business, and this is going to be a very, very big business," he said. "It's like saying in 1982, 'Who else wants to build a PC?' when all the major companies were formed after that."

Handspring has secured financing from Kleiner Perkins Caufield & Byers as well as Benchmark Capital, and reportedly has about eight employees, including Ed Colligan, former vice president of marketing for Palm Computing at 3Com.

Hawkins is serving on the firm's board with John Doerr of Kleiner Perkins and Bruce Dunlevie of Benchmark.

"It's always good when someone comes out of nowhere and is successful," said Hawkins, attempting to explain the early interest in the company, which has not yet announced a product. "PalmPilot is also something that came out of the ashes of the hailed pen computing industry, Apple's Newton, and all the attempts Microsoft has made."

"We missed the opportunity last time when this team sparked the handheld computing revolution," Doerr said. "This is a rare second chance to lead the next generation of computing."

Reuters contributed to this report.

 

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