Palm reveals new company name

The company, which makes handheld devices and the operating system they run on, intends to call itself "Palm" until it finishes buying rival Handspring and spinning off its software unit this fall. At that point, the new hardware-only company will adopt the PalmOne moniker, while the OS provider will keep its current PalmSource name.

The move ends a complicated effort to divide the company while making sure each new part will reap the benefits of the well-known Palm name. The effort to name the two halves has been under way since the handheld provider started making plans to split two years ago

Where the biblical King Solomon only threatened to divide a disputed baby in two, Palm has undertaken to actually split its venerable brand in two.

"If one company just stayed the plain P-A-L-M, it wouldn't be fair to the other company," said Ken Wirt, Palm's senior vice president of sales and marketing.

Neither the hardware maker nor the operating system company will get to make full use of the Palm name, which will be owned by a holding company jointly controlled by both entities. PalmSource, the software company, will own 55 percent of the joint entity, though major decisions will be made by both partners, according to Palm.

Wall Street will also notice a change, as the familiar "PALM" ticker symbol will be replaced by PalmSource's "PSRC" and PalmOne's "PLMO."

Part of the difficulty facing the company stemmed from the use of the name "Palm" for more than one thing: Right now, it describes the company itself, the handheld devices it makes and the operating system these run on. The device company's board of directors spent considerable time and money trying to solve the issue, shelling out hundreds of thousands of dollars on focus groups and on naming consultants, before settling on PalmOne.

Once the switchover has taken place, the operating system will keep the name "Palm," and other companies that use the OS in their products will be able to continue describing those gadgets as "Palm powered."

Hardware company PalmOne, however, will drop the well-known Palm logo from its products. In doing so, it is losing one of its key selling points, according to analysts. In recent years, analysts said that Palm had fallen behind rival device makers such as Sony in terms of innovation, but was able to maintain its No. 1 position largely because of buyer loyalty to the brand.

But Wirt said that what's important is that "Palm" will remain part of the name on the devices. He noted that the company's handhelds had changed their name in the past. The original devices were known as Palm Pilots, a term that became etched in consumers' minds. Later, however, that name had to be changed to settle legal issues raised by pen maker Pilot. The Milpitas, Calif.-based handheld maker has also used an array of numerals, letters and colors to identify its products throughout its more than 10 years of existence.

"The thing that's been consistent the whole time (are) those four letters, P-A-L-M," Wirt said. "That's what people respond to."

Although the PalmOne name was chosen before the Handspring deal was announced, Wirt said it is especially appropriate, given that the deal will reunite Palm with some of its founders.

The red and orange PalmOne logo will appear on new hardware products in the spring, according to Wirt. However, a series of handhelds set to debut this fall will have the traditional blue Palm medallion.

"We couldn't be sure enough of the exact date to put the name in this fall's products," Wirt said.

IDC analyst Kevin Burden said "PalmOne" is an improvement on the temporary "Palm Solutions Group" name that the hardware unit has been using.

"The slight retreat they've done from enterprise seems to make 'solutions' less important to Palm these days," he said.

However, it remains to be seen whether the hardware unit will lose any ground by giving up its claim to the Palm name. "We'll see how well they do," he said.