American History 1988
Chapter 410 - 399: Planning for the Future

Chapter 410: Chapter 399: Planning for the Future

"Palm performed well this year, what are your thoughts on the next generation of products?"

Although the antitrust case with Microsoft was ongoing, there was some time before the next court session, so Dean took this opportunity to handle other tasks.

As his investments in the internet sector gradually increased, Dean consciously diversified his asset portfolio.

Businesses like Palm that dealt with physical electronic products were increasingly gaining his attention.

Given that there had been frequent good news from Hawkins lately, Dean had decided to come and see the situation for himself.

"Regarding the second generation product, we plan to reduce its size even further, and also increase the resolution to 320*240.

Many users have reported that when there are a lot of text contents on the page, prolonged use can easily lead to eye fatigue."

For the next generation of Palm, which is the Palm II, Hawkins had been very ambitious from the start.

Besides these hardware upgrades, he also planned to further enhance the handwriting recognition rate, aiming for 100%.

More software applications were in development, including some video games.

The software ecosystem of Palm was becoming richer, and many third-party developers were eager to publish their creations on this new platform.

Of course, Palm’s popularity was a contributing factor, as this PDA had made a historic record.

By the end of the year, it had been just over half a year since the Palm’s first generation product was launched.

According to statistics from the distribution channels, the three versions of Palm had already sold a total of 1 million units.

None of the competing products on the market could reach this level, especially in just over half a year.

It had exceeded not only Hawkins’s expectations but had also surprised Dean greatly.

Honestly, the functionality of handwriting computers was very limited at the time, but the market demand was still strong.

This might be related to the current technological surge, but Dean did not want to delve into the reasons.

"Send me your design plans, and try to press the price even lower," he said.

Dean’s goal was to incorporate a backlight feature into all the products of the Palm II series.

At the same time, it would be best if the price of the high-end version could be kept within $369.

Though there were no competing products on the market right now, that did not mean there would be none in the future.

Dean guessed that companies like Siemens and Sharp were covertly studying Palm’s products.

They were good at such things, and were also very capable in cost control.

Therefore, to increase the barrier to competition, the prices at Palm needed to be reduced further.

Hawkins silently calculated for a while, then optimistically nodded.

"With Palm’s shipments crossing the threshold of 1 million units, we have already gained considerable bargaining power with the suppliers."

Jokingly, when your product sales are poor, you beg suppliers and foundries to work with you.

But if your product is a big hit, things turn around.

Take Palm as an example; the cost for the first batch of 100,000 units was $180 each.

Now that number is less than $150, and although the space for further reductions gets smaller, as long as there are orders, bargaining power is not a worry.

Carefully calculated, with these 1 million sales, Palm had made at least $130 million in net profits this year.

It couldn’t yet compare with longstanding enterprises like HP or Compaq, but it was very impressive for a company that had just started.

Following this trend, as long as the next-generation products did not encounter a debacle, the growth next year would only be more remarkable."

"By the way, Jeff, have you considered adding other product lines for Palm?" Dean tapped his finger lightly on the desk, continuously pondering something.

"Other product lines?" Hawkins was stunned; honestly, he had been focusing all his efforts on the next-generation product of Palm.

As for other ideas, he currently had no time to consider them.

"Yes, to enhance the ability to withstand risks, it is inevitable that Palm will enrich its product line in the future."

Companies focused on a single business can manage well during favorable times. Once adversity hits, they risk bankruptcy.

"I have some ideas," Dean said as he pulled out a sheet of paper from his desk and began to write and draw.

"First is the operating system, based on the current Palm OS, we will develop a separate line aimed at mobile devices.

Note this mobile device is not the current PDA, nor is it a mobile laptop, but rather a cell phone!"

"A cell phone?!" Hawkins’s mouth fell open slightly, this option was completely beyond his expectations.

When it came to cell phones, the first thing that came to Hawkins’s mind were the black and white screen keypad phones from Motorola and Nokia.

They had been very popular in the past couple of years, almost every business person had one, including Hawkins.

However, he was still puzzled by Dean’s intention to enter the cell phone market.

"Dean, Palm entering the cell phone market could be considered, but to specifically organize a team to develop an operating system?"

Hawkins shrugged his shoulders; did the current phones have an operating system?

Those basic functionalities didn’t need a separate system to be developed for them.

A small team could get it done in a month or two.

In Hawkins’s view, the barrier to entering the cellphone industry was in communications, not the operating system.

"No, Jeff," Dean shook his head, "The operating system I’m talking about is not those you see now.

It operated based on touch-screen technology just like the PDA, but it had higher intelligence requirements.

In addition, in terms of hardware, it also featured a higher resolution and a color display screen.

Chips, memory, baseband communication, all these needed to be redesigned, even at a higher integration level."

With each point Dean made, Hawkins’s eyes widened a bit more.

"Dean, are you sure this is a mobile phone, not a computer?"

"Saying so isn’t wrong," Dean smiled and nodded, "In the future, it will essentially be a handheld computer."

"But with the current technology..." Hawkins shook his head, "It feels more like a science fiction product."

"Relax, this isn’t a short-term goal for Palm. My initial plan is to release the first prototype around the millennium.

In addition, to implement this operating system design, I will also invite Jerry Kaplan to join the team.

Also, at the SRI, I contacted Professor William Miller. They are willing to collaborate with Palm on this project."

Jerry Kaplan is a renowned expert in artificial intelligence, and he is also a pioneer in commercializing such intelligent operating systems.

The Penpoint system of Go Corporation’s handheld computer was developed under his leadership.

Dean and he had known each other for a while, and the latter was also a visiting professor at Stanford University.

Because of these connections, Jerry Kaplan readily accepted the invitation after hearing Dean’s description of the future cellphone.

As for the SRI, it stands for Stanford Research International.

It is a nonprofit organization with its research focus encompassing fields like medicine, chemistry, material science, AI intelligence, among most others.

Its most famous area is AI intelligence, more specifically, research directions like voice recognition and biometrics (fingerprints, pupils).

The well-known voice assistant Siri from the Apple system was born here.

Normally, SRI is not accustomed to collaborating with other commercial companies.

But who could resist when Dean had recently donated a hefty sum to Stanford, plus William Miller of Bit Corporation being an independent director at SRI?

See, Dean had connections everywhere; the Matthew effect was aptly applied here.

Indeed, after hearing about such a stellar lineup, Hawkins’s doubts were significantly allayed.

"If the millennium is the target, maybe we could give it a try."

"Good, that’s what I wanted to hear," Dean nodded in satisfaction, "Keep in mind, the mobile phone business is a long-term strategy, Palm also needs a mid-term goal with a two-year development cycle."

"So it is..." After the bombardment of the mobile phone project, Hawkins was no longer surprised by Dean’s myriad ideas.

"Have you heard of flash memory?" Dean said with a smile.

"The Intel company seems to have a similar business." Hawkins had considered it in the design process for Palm, but unfortunately, it was not quite suitable.

"No, Intel’s flash memory is too large," Dean shook his head, "I need flash memory smaller than a fingernail and cheaper too."

"Smaller than a fingernail?" The more Hawkins heard, the more confused he became; he just couldn’t comprehend what Dean was trying to achieve.

"Well, I recently plan to acquire an audio company." Dean continued to scribble on a piece of paper.

"I plan to create a device, or call it a music player if you will, but it will be different from Sony’s Walkman.

This player will operate without the need for cassettes, but rather through digital audio."

"Using flash memory to store audio files for music playback?" Hawkins got it immediately; he was, after all, an expert in electronic product design.

"Exactly!" Dean was pleased that his collaborators were a bunch of exceptionally smart folks.

"This player will need to be used in conjunction with music software, involving issues of song downloads and transfers, of course, music rights are a key concern.

However, Palm need not worry about these, the hardware design is what you need to focus on. As for the music rights and the player software, I will handle that."

Dean had already hooked up with Seattle’s Real Network company. He was in talks with Robert Glaser, preparing to acquire it for 1.3 billion US dollars.

The fact proved that competing against Microsoft was not an easy task, not everyone could survive unscathed.

Microsoft might not be able to take down Netscape, but dealing with an unlisted Real Network was a piece of cake.

The acquisition would be conducted in the name of Palm, which would facilitate resource integration.

Anyway, Dean owned over 70% of Palm’s shares, for him it didn’t matter who was the controlling party behind this deal.

And about the name of this music player, Dean had even thought of it already.

It would be called iMusic, the same name for both hardware and software. It was easy to pronounce and beneficial for brand dissemination.

In summary, Dean planned to increase his investment in Palm.

The PDA could continue to be further developed and could eventually transform into a tablet computer.

The mobile phone business didn’t need to pursue full intelligence at the start, rather beginning with touch screens from the 2G, 3G era.

iMusic music player could also turn out to be a good business, with his connections in Hollywood, music rights would likely not be a barrier.

By then, launching a subscription service at 13 US dollars per month, or a single song download fee of 0.99 US dollars, would all be viable payment models.

His investments in the internet sector were already substantial, hardware products would be his next focus.

See, as soon as he let slip a hint about this area, people immediately came knocking on his door.

And the one reaching out to him was not just anyone, it was Stanford University.

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