Eric Benhamou: The Saga Of Palm (Part 9)

SM: You were losing market position at this point. Did you ever consider selling to Apple? EB: There might have been an opportunity to do that before the iTune/iPod product division was too far along, but I do not think this became a real opportunity in the timeframe that would have interested us. Had we not turned around the business in the 02-03 timeframe, Apple would have certainly looked at it closely and they would have jumpstarted their efforts into this form factor. However, we would have been selling at the bottom of the market, a company in decline that was losing market share. After turning around the business, we created new value for Palm, but as a side effect we lost a potential acquirer.

SM: Once you had revived Palm, what was your next step? EB: We became very interested in exploring all of our options at the end of 2006. At that time, it was clear we had to paddle faster; we did not have enough resources to move into the next generation. Our team did not have a lot of superstars. We had some good journeymen, but no superstars. This was not the type of team that was going to carry us into the big leagues. Our demeanor as a company made this evident; it became clear that our investors understood that.

For a company that was growing profitably in a hot market, we had one of the lowest multiples, which is to say that we were suffering steep discounts in terms of market value given to us by investors compared to peer companies. The lack of critical mass, not providing new breakthrough products, it all had became more and more visible. It was pretty clear if you looked at the Treo 680 and compared it to the Treo 650, they were very similar products. It no longer had the antenna which protrudes, and had a bit different form factor, but from the user perspective it is the same product.

SM: The company was regurgitating, spinning, and looking positively lackluster by the end of 2006, and the stockprice reflected that situation.

[To Be Continued]

[Part 8]
[Part 7]
[Part 6]
[Part 5]
[Part 4]
[Part 3]
[Part 2]
[Part 1]

This segment is part 9 in the series : Eric Benhamou: The Saga Of Palm
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