Palm chief executive Ed Colligan spent several days in Cannes in
February 2004 talking up the Treo handheld computing device over its Windows-based competitors. But that same week, away from the massive 3GSM trade show, he was secretly meeting with the enemy.At a nondescript Comfort Inn a short distance from the main conference centre, Colligan and several Palm colleagues held a clandestine gathering with a team from Microsoft that was led by mobile unit head Pieter Knook. The groups took separate cabs to the hotel, met for several hours in a conference room, and then returned to the conference as though their rendezvous had never happened.
The secret meeting, to discuss business terms of a possible partnership, paved the way for the developers of the Palm operating system to join up with a company that had once been their fiercest rival.
Now Colligan and his Microsoft counterparts have gone public. On Monday, Colligan and Microsoft Chairman Bill Gates were on a ballroom stage at the Palace Hotel in San Francisco to announce plans for a Windows-based Treo.
Rivals' fortunes tied
The combination seemed unthinkable just a few years ago. Palm
envisioned itself as a substantial rival to Microsoft, threatening to
head off its computing dominance as the power of desktop computing
shifted to pocket-size devices. But a series of miscues substantially
weakened the company, leaving it little choice but to team up with the
world's largest software maker.
Although Palm has pledged to continue using the Palm OS in both handhelds and phones, the company has now significantly tied its fortunes to the rival it once denounced.
In doing so, Palm is making a tough bet. The company is gambling that...
