New PalmPilot president faces tough tests

Robin Abrams, formerly chief executive of Verifone, must guide Palm Computing through some potentially rough waters, as competition from Microsoft and its Windows CE manufacturing partners heats up. Then too, Abrams must oversee the development of new products to keep ahead of rival Palm operating system-based companies.

Analysts believe that the next 18 months will be crucial to the company's long-term fortunes.

Abrams, a sales and marketing veteran of Apple Computer and a PalmPilot user, has an unenviable position--following in the footsteps of the company's popular cofounders, who grew the company from start-up to market leader with an established base of over 2 million users.

"The world now recognizes that Palm is the fastest-growing consumer product this world has ever seen," Abrams said in an interview. "That is an incredible draw to any technology manager," she said in explaining her decision to join Palm.

Abrams takes over for Janice Roberts, acting head of Palm Computing since the departure of cofounders Donna Dubinsky and Jeff Hawkins, who headed Palm before its acquisition by U.S. Robotics and then 3Com. Roberts will return to her role as senior vice president of business development.

"As Robin's colleague, I will support her in my business development role," Roberts said, mentioning acquisitions as a possible means of expanding PalmPilot's business. "Palm has now become the fastest growth business at 3Com...I will support her in developing strategic business alliances around the world."

Both Roberts and Abrams said that licensing deals will be an important way to compete against Microsoft and its legion of manufacturing partners for its Windows CE devices.

Ironically, Dubinsky and Hawkins left 3Com to start Handspring, which will license the Palm OS for use in entry-level handheld devices. The two cofounders are acknowledged as the visionaries behind Palm's existing product line, and widely thought to be responsible for several of Palm's future products, including the upcoming Palm III X, V, and VII products.

"They've [Palm Computing] got some major issues that they've got to address," said Gerry Purdy, editor of industry newsletter Mobile Insights.

"They have to address the future of the technology, how it is going to evolve and catch up to the world of wireless, color displays, flash storage, and open architecture APIs," he said, referring to Microsoft's newest Windows CE devices. "I would say that another major challenge is how are they going to relate to Microsoft and what is obviously happening with improvements to Win 32 API environment for Windows CE."

"Any pioneer knows they can never be complacent," Abrams said. "At the core of Palm's success is the product offering, and we will not lose focus on what has created that," she said.

Abrams said her first task will be to rebuild the management team hit by departures that also included Palm's marketing director, Ed Colligan. "Hiring these vacancies and continuing the leadership in terms of product design" is the first priority, Abrams said, adding that the deadline for beefing up the top management team was "yesterday."

But Purdy wondered, "How can this group of senior people and founding figureheads of this whole platform be replaced?," noting that the next year and a half will be crucial in determining whether Handspring or 3Com controls the future of the platform.

"In the short term they've got some hot stuff coming down the pike, but a year or two years from now it's going to be a whole different ball game," he said. "In a sense, she's got a year to 18 months to take on these major issues--her ability to be successful will weigh heavily on how she performs over the next 18 months."