The whole world in her handheld

Donna Dubinsky made PalmPilot the must-have handheld. But now she's taking on Palm with her new company, Handpsring, and its Visor organiser

Donna Dubinksy obviously likes a challenge. As the president of Palm Computing, she took on Microsoft and established Palm as the world's leading manufacturer of hand-held electronic organisers. And now her new company, Handspring, is going into competition with Palm.

The Palm Pilot, the hand-held computer invented by Jeff Hawkins - who has also joined her at Handspring - was one of the great success stories of the 1990s. Apple may have been there first with its Newton device, but it never achieved mass-market success. And while Psion's range of hand-held computers has established it as one of the UK's few world-class computer manufacturers, Psion has never achieved the same success in the United States as it has in Europe.

In contrast, the Palm Pilot was one of the fastest-selling consumer electronic devices of all time. It sold more than 400,000 units when it was launched in 1996, and Palm now has more than 70 per cent of the market for handheld devices. Palm's biggest rivals, companies such as Casio and Hewlett-Packard, who use Microsoft's Windows CE software in their products, can barely muster 20 per cent between them. Not surprisingly, Dubinsky is dismissive of CE. "It's dead. It's unusable," she said.

Even so, Palm struggled in the early days. "No one was making money out of handheld computing," says Dubinksy. "Investors weren't willing to bet on the [handheld] sector again, after the failure of products like the Newton." So Dubinsky and Hawkins allowed Palm to be taken over by the modem manufacturer US Robotics in order to obtain the financial backing they needed. However, US Robotics was taken over in 1997 by networking giant 3Com, which is when matters took a turn for the worse.

Dubinsky's press release is tactful, saying that she set up Handspring because she wanted to "control my own destiny again". But face-to-face, she is critical of 3Com's management of Palm. "We shipped five products in our first three years. But they haven't done much in the 18 months since we left."

It was 3Com's inertia that encouraged Dubinksy to leave and set up Handspring. "We wanted to develop the Palm platform further," she explains, "but they were slow in moving forward." Dubinksy tried to spin-off Palm as a separate company, but 3Com's management refused. However, Dubinsky believed that the handheld computing market was still in its infancy and that there was room for another major player.

She is probably right. It is estimated that the market for handheld computers will grow to more than 13 million units in 2001, and will continue to grow rapidly over the next few years as the devices become more powerful. It is unlikely that Palm will be able to control the entire market by itself, and Dubinsky and Hawkins saw an opportunity to go it alone once more with Handspring. The new company's first product, the Visor, was launched in the US at the end of last year, and Dubinsky visited the UK recently to prepare for the Visor's European launch next month.

Dubinsky's real coup, though, was to convince 3Com to license the Palm OS - the operating system software that controls the Palm device - to Handspring. Using the Palm OS in the Visor would ensure that it was compatible with the wide range of Palm software already available, which would help to ensure market acceptance for this new product.

"3Com realised that it was in their best interest for Handspring and Palm to be partners," Dubinsky explains. Using the Palm OS in the Visor "helps 3Com/Palm to establish it as the worldwide standard for handheld computing. This is important to Palm in the long-term - Palm receives both royalties and market share from the products we sell", she says.

Dubinksy didn't leave Palm by herself. Having licensed the Palm OS, she also took Hawkins with her, along with most of the original Palm engineering team and the company's marketing chief, Ed Colligan. In effect, she transplanted the entire Palm team and its core software technology to Handspring.

It's not surprising that the Visor looks and feels very much like the existing Palm organisers. "That's partly intentional," she admits. "We designed the Palm Pilot, and we think we pretty much got it right, so we wanted to use the same basic design." But she insists that the Visor does advance the state-of-the-art for handheld computers through its use of a new expansion slot, called Springboard, which is tucked away at the back of the unit.

You can add expansion modules such as a modem to a Palm Pilot, but the Springboard slot is more versatile. "It will, I think, become the standard for handheld expansion," Dubinsky predicts.

The Springboard slot can be used to add new hardware modules that give the Visor entirely new capabilities. There are already modules to connect a digital camera or scanner to the Visor, and Dubinksy says there are many other add-ons in the works, such as an MP3 player and various wireless-networking modules. There's even a module in development that will turn the Visor into a cellular phone.

The one area Handspring hasn't managed to improve on is the Visor's handwriting recognition. The handwriting recognition in Apple's Newton was so unreliable that it ended up as a running gag in the Doonesbury cartoon strip. The Graffiti handwriting software used by both the Palm Pilot and the Visor is more reliable, but it forces users to learn a kind of shorthand notation that is easier to recognise than ordinary handwriting. This limits the device to recognising small snippets of hand-written information, such as telephone numbers and addresses, and it's not ideal for taking large quantities of notes or detailed information.

"Journalists always complain about taking notes," sighs Dubinksy, but she admits that handwriting is a tough nut to crack. "Can handwriting recognition get better? Not in the foreseeable future - it's a really, really hard problem."

Maybe so, but given Dubinsky's track record, it's probably not a good idea to bet against her solving it in the next couple of years.

What has visor got that palm hasn't?

It's not surprising that the Visor bears a striking resemblance to the Palm range of electronic organisers, given that Palm's management and engineering team followed Dubinsky en masse when she left to set up Handspring.

The Visor is the same shape and size as its Palm rival. It has the same set of controls on its front panel, and the use of the Palm OS means that the Visor's software works in exactly the same way. The only immediately obvious difference is that the Visor has done an iMac and is available in several translucent colours.

But there are some important differences. The cradle supplied with the Visor has a USB (universal serial bus) interface, which means that you can immediately connect it to any PC or Macintosh that has USB and quickly transfer information between the Visor and your computer. Palm still hasn't added USB to its products, so you have to buy a separate USB adapter kit if you want to use it with a USB computer, such as an iMac.

The big difference is the new Springboard expansion slot, which allows you to add all sorts of expansion modules that aren't available to users of Palm products. It's early days, though, and there aren't that many Springboard modules actually on the market yet, but the technology seems to have great potential. I can't wait to plug in the module that turns it into a mobile phone - the pose value alone makes it worth buying a Visor.

There are two Visor models, one with 2Mb of memory and a Deluxe model that has 8Mb. Handspring hadn't confirmed its UK pricing as we went to press, but the US pricing has been lower than that of Palm's products and has prompted a recent spate of price cuts on Palm's website.