American History 1988
Chapter 390 - 379: A Good Start

Chapter 390: Chapter 379: A Good Start

"Jeff, do you have good news to tell me?" Before heading to the East Sea, Dean stopped by Palm Company first.

"Of course! You should know how popular it is, Dean," said Hawkins, his voice high with excitement, almost dancing with joy.

"I’ve heard some, it seems to be very popular on Wall Street." Dean followed Hawkins into the gates of Palm Company.

"Not just Wall Street, it is the darling of all businessmen, so it has brought us..." Hawkins swung the door open, "Surprise!"

"Yeah~Surprise!" The moment the door was pushed open, all the Palm employees who had been hiding here cheered in unison.

Along with the shouting, there were also "bang! bang!" noises incessantly heard, which were the sounds of confetti scattering.

"Wow, this looks like an exciting moment," Dean said, eyes wide with surprise.

Apart from welcoming Palm employees, there was a numeral "8" made of Palm boxes in the front hall.

Music played just in time, and employees twisted their bodies joyfully amid the confetti rain.

The atmosphere inside the hall reached its peak, and under their influence, Dean also laughed and stepped into the dancing crowd.

It was only after a tune ended that everyone gradually calmed down and applauded in celebration.

"OK, guys, it’s time you told me what this surprise is all about." Dean’s gaze rested on that numeral.

"80,000 units!" Hawkins exclaimed excitedly, raising his finger, "Our Palm went on sale less than two weeks ago, and we’ve already sold eighty thousand units!"

"Oh~" This time Dean was genuinely shocked, "These are sales, not shipments?"

"Yes, that’s right! These are sales, not shipments!" Hawkins laughed heartily, pleased with Dean’s astonished expression.

"Well done, guys! You did it!" Dean generously clapped his hands.

At the same time, bottles of champagne were opened, and the spraying foam once again immersed the atmosphere in frenzy.

80,000 units sold in less than two weeks might not sound remarkable.

Placed in later years, some popular smart devices could easily manage a million units a week.

But this was 1996, and moreover, it was in the nascent market of PDAs.

Apple’s Newton MessagePad had been on sale for over a year, but the total sales were only 40,000 units.

The Zoomer, developed previously by Hawkins and his team, shipped a total of 20,000 units from its birth until the project disappeared.

Durell’s previous venture, the EO Company, had only sold a mere 10,000 units after being acquired by AT&T.

This was the current market scenario for PDAs, yet Palm broke all their records in less than two weeks.

It was undoubtedly a revolutionary achievement, and most importantly, Palm had just started selling.

According to market norms and the ongoing push of marketing and advertising, the sales peak had not even arrived yet.

The first three months would probably be a high-speed growth period, and whether it could go further would depend on market acceptance and brand recognition.

For now, however, Palm was undoubtedly successful.

It was warmly received by consumers almost immediately upon launch; this PDA was destined to stand out.

Firstly, its price was low enough, with an entry-level of 299 US Dollars, affordable for any middle-class person.

Look at the game consoles on the shelves of department stores; they all sold for four to five hundred dollars. Compared to them, Palm was an absolute bargain.

Additionally, among similar products, Palm was priced the lowest, almost half that of its competitors.

Previously, many who were tempted by PDAs but hesitant, now no longer had any reservations.

Besides the price, one of Palm’s other core competitive advantages was its compact elegance.

As previously mentioned, it could be used with one hand and could be tucked into any pocket of an outfit.

"Please wait a moment... let me check my schedule today," people said as they pulled out the black Palm from their pockets.

This scene was no longer uncommon on the streets of major cities like New York.

Palm was smaller than Newton MessagePad by a notch, about half the size of a GridPad, while also being the thinnest PDA available.

With these advantages of price and compact design, it penetrated the market down to the middle-class.

The PDA was no longer exclusive to elite businessmen; regular office workers could also afford one.

Hawkins and his team unanimously believed that now was the time to increase the production orders for Palm to cope with the impending surge of orders.

"Alright, tell me your plan," Dean and Hawkins went back to the office after the celebration.

"It turns out our initial stock of 100,000 units was nowhere near enough, we need at least three times that!" Hawkins raised his finger.

"We should place an order three times larger with the OEMs so we can ensure Palm is distributed in every major city across America."

Before launch, Dean had secured distribution channels with Hill’s Department Store and Walmart and decided to stock 100,000 units initially.

This was a watershed because as long as the order reached 100,000 units with the OEMs, Palm’s cost could be reduced to 180 US Dollars.

A 10% cost reduction, for a volume product in electronics, was already a remarkable figure.

At the same time, this also meant that if this batch of PDAs was sold out, then Palm could profit.

The development of events was even better than their most optimistic projections; not only was the issue of profitability solved, but there was also the potential for a huge breakout.

The remaining 20,000 units in stock could hardly last long.

The OEMs were already working overtime to produce; they also received an urgent order for 100,000 units.

But Hawkins wanted to double down — he aimed to use this surge to make Palm synonymous with handheld computers!

Dean hesitated slightly. While tripling the inventory would further compress costs, it was also an investment of forty to fifty million US dollars.

Given Palm’s current small scale, if the market faltered later, it could well end in bankruptcy.

However, considering there were no comparable competitors on the market at the moment, and Hawkins’s grand ambitions, Dean made up his mind instantly.

"Take our purchase orders to the banks for loans, then go and talk to the OEMs.

Under the premise of adding three hundred thousand orders, the costs could be compressed by another 10% to 15%. However, ship in batches."

"This could alleviate our financial pressure. In two months, when the sales channels start returning money, Palm should be on stable footing."

That’s the way it goes with hardware products: constant investment in the early stages.

Production, stockpiling, channel returns – these are all part of the barrier to entry.

Without sufficient funds, a normal startup can’t handle real business.

Though Dean was wealthy, doing business with one’s own money was not the way.

All of Palm’s funding was through loans. If the business ended up not doing well, bankruptcy was the worst outcome — how would that be Dean’s concern?

With Dean’s approval, Hawkins excitedly pumped his fist, "Trust me, Dean, Palm will redefine the PDA market!"

His blatant boasting almost made Dean laugh out loud — the line sounded so familiar.

"I look forward to Palm’s performance. But our PDAs have already sold 80,000 units — have we received any customer feedback?"

The sample size was ample, and Dean also wanted to hear customer ratings.

"Uh, our Palm is quite perfect," Hawkins said with an awkward face, "but we indeed received some feedback from users."

"What?" Dean curiously pursued.

"It lacks a backlight," Hawkins shrugged. "In poor lighting, it’s difficult for users to see the screen."

Dean paused — he too had overlooked this when he initially tried it.

"Can the backlight issue be resolved?"

"Of course. We just need to place a few light beads under the screen, and it can be fixed at a cost of a few US dollars."

Hawkins was clear about the hardware details; such minor features were no trouble for him.

Dean stroked his chin thoughtfully for a moment, then made a suggestion.

"Let’s add a backlight panel to the Palm 5000, priced at 399 US dollars."

It was already too late to revise the Palm 1000 and Palm 5000 models.

Moreover, both products had relatively low profits. Increasing the volume without raising the price clearly wasn’t a capitalist approach.

Also, what would the initial buyers think if the product was modified just one or two months after launch?

Thus, the best approach was to add another version, adjust the design slightly, and add the backlight feature.

Hawkins’s eyes lit up — this was a good solution. It not only addressed the feedback from customers but also prevented complaints from existing users.

"If the production process goes smoothly, we could introduce the backlight panel in one or two months."

"Good. I look forward to Palm creating more records." With the issue resolved, he felt reassured.

Dean’s visit today was to boost everyone’s morale and to discuss ongoing developmental issues with Hawkins at Palm.

Now was the time to leave; he had agreed to meet Steve Case.

...

"Yahoo is stirring up storms on Wall Street, and you arrive just as it’s about to go public.

Your founder status really makes people envious," Steve Case said, not without jealousy, as he embraced him.

"You know, that’s just for the press," Dean said, patting his back affectionately.

During Yahoo’s roadshow period, its shareholder list had been made public.

Dean’s name prominently featured, and he was listed as a founder alongside Yang Zhiyuan and David.

This was suggested by Yahoo’s marketing team who believed it would make the company more attractive to investors.

Dean agreed — after all, appearing publicly was just normal business.

So while Yang Zhiyuan and David traveled the world for the roadshow, Dean, who was only nominally involved, was busy with his own affairs.

"All right, tell me, what news do you have from Seattle?" Dean asked as they settled into the sofa area.

"This time, it’s something unusual," Steve Case said, his expression turning much more serious.

Dean, who had been casually sipping his coffee, paused and looked up, "Is it Netscape?"

"You know?" Steve Case asked, surprised.

Dean scoffed, "Netscape has become a major problem for Microsoft now. For Seattle to set aside its prejudices and reach out to you, a competitor,

I can’t think of anything else but Netscape that would make them take such a step."

"Gates has an opponent like you, his title of ’wealthiest man’ isn’t wasted," Steve Case suddenly laughed. "Honestly, I’m really looking forward to what comes next."

Dean shook his head helplessly, "OK, so why did Microsoft contact you?"