The group includes Jeff Hawkins, inventor of the Palm Pilot; and the family foundations of Andrew Grove, co-founder of Intel Corp.; and Mark Leslie, founder of the former Veritas Software Corp. Laurene Powell Jobs, widow of Apple Inc. co-founder Steve Jobs, has for years supported undocumented students through her organizations that help low-income high-school students.

Read the rest of this post on the original site »

HP has announced to the world that it plans to stop selling its TouchPad tablets and other hardware running the webOS software it got after spending $1.2 billion to acquire Palm last year. Yet it wants to keep the webOS software, guessing, perhaps correctly, that there’s some revenue-generating business to be made of it yet, maybe in patents. Meanwhile, the hardware side of webOS is, after disappointing sales, being shut down, just maybe to be reanimated under the umbrella of the soon-to-be spun out PC business. And it’s building one last run of the heavily discounted TouchPad, to rid itself of parts it has already paid for. It’s complicated!

As it happens, a pair of internal HP memos — which were leaked to PreCentral.net, a site devoted to the Pre, the first smartphone to run webOS — appear to outline how the webOS split is going to go down.

According to the memos, the webOS software business — that is, the bit that HP still wants — is being moved inside HP’s Office of Strategy and Technology, or OS&T, which is headed up by Shane Robison, HP’s executive vice president and chief strategy and technology officer. One of the two memos was written by him.

And what of the webOS hardware group? It will remain within the Personal Systems Group, which is HP’s formal name for the personal computer business it says it wants to spin off as a separate company.

It’s not the first time that the hardware and software halves of what used to be Palm have been split into separate entities. Students of the history of Palm well remember the strange odyssey that began in 2002, when Palm — less than two years after spinning out of its prior parent, 3Com — split into two companies: A hardware company called PalmOne, and a software company called PalmSource.

The idea was that the two halves of the business had different agendas. The software business saw opportunities in licensing the PalmOS to numerous hardware manufacturers. In time, several companies took out licenses: Handspring, launched by Palm’s original founders Jeff Hawkins and Donna Dubinsky, was the original licensee, and others followed. Sony made a bunch of handhelds sold under the Clie brand; IBM sold something called the WorkPad; Garmin made a GPS-enabled PDA that could also help keep you from getting lost. Eventually a company called Access bought it and still operates it to this day.

Meanwhile, the hardware business soldiered on under the name PalmOne. In 2003, it acquired Handspring, bringing back its original founders, and in 2005 it bought back the rights to use the Palm name. Then, in 2007, came the big investment from Elevation Partners, the creation of webOS and, well, you know how that turned out.

The details are still unclear about exactly what Hewlett-Packard is going to do with its personal computer business.

There are many options, ranging from a spinout as an independent company, to a sale to a private equity firm, to, as CEO Léo Apotheker said on a conference call yesterday, no transaction at all. But two more likely scenarios stand out.

The first and most likely option would be for HP to spin off the PC business by creating a separate company and distributing the shares to investors.

The most obvious example to consider is that of Motorola, which split into two companies, Motorola Mobility and Motorola Solutions, at the beginning of this year. (Google has now bid $12.5 billion to acquire Motorola Mobility.)

There are specific advantages to doing it this way rather than selling. As a distribution to shareholders, there would be no tax impact to HP. In a sale, there would be taxes on the income from the sale of assets.

If a split is what ultimately happens, then there are lot of new questions. Who would run the new business? A leading candidate is Todd Bradley, who is currently the head of HP’s Personal Systems Group, and, coincidentally, was once the CEO of Palm. Bradley is a well-regarded executive and had been considered the most likely successor to former CEO Mark Hurd, before Hurd’s sudden resignation last year. Bradley was unsuccessfully recruited by Intel earlier this year. Having been passed over for the top job at HP, he now has a clear runway to be CEO of its spunout independent PC company if that’s what HP decides to do.

But what if HP doesn’t spin out, and decides to sell the unit instead? Who would buy it? Sources said that HP quietly shopped the PC division around earlier this year to companies in Asia, several of whom kicked the tires. In the weeks leading up to yesterday’s announcement, when conversation with various PC industry observers turned to HP, it wasn’t long before speculation of a sale would come up, soon followed by speculation about a possible buyer.

The most likely candidate in almost every one of those conversations was Samsung.

While Samsung isn’t a significant player in the PC business in North America, it is a more active player in Asia. And its other businesses, specifically its chip manufacturing operations, are deeply enmeshed in PCs. Samsung is the world’s biggest supplier of PC memory, or DRAM. It’s also the world’s largest supplier of flash memory, which is increasingly being used to build solid-state hard drives in PCs.

And since PCs have played an increasingly central part in the consumer business, it would fill a significant hole in Samsung’s lineup of televisions, phones, cameras and other electronic devices. And if there’s one thing that Samsung is good at, it is manufacturing products that carry thin profit margins, such as TVs.

HP’s Personal Systems group also did a $40 billion business last year, with an operating margin of four to five percent. Add to that HP’s status as the largest supplier of PCs to key retail outlets like Best Buy and Wal-Mart in the United States and numerous other retail outlets around the world, and the target becomes even more enticing.

What would it cost? As a business in decline, not much. Sales were about $40 billion in 2010, and are on track to be about $32 billion this year. Analysts note that as a shrinking business it wouldn’t command much if any premium, and might even sell for about half of 2011 sales. That yields a price in the $16 billion to $20 billion range.

This would be smaller than what Dell trades at right now, which, at a market cap of $26 billion, is about eight times trailing earnings, but is valued at a startling 0.4 times the current year’s expected revenue of $64 billion.

Many wonder why the process HP has outlined will take 12 to 18 months.

Complexity, for one thing. HP’s PC business is made up of lots of little parts around the world, all of which will have to be rolled into one legal entity. Then there’s the matter of figuring out which people and assets belong to the PC unit and not the printing unit.

Sources said HP has hired Perella Weinberg Partners as its financial advisor; and two law firms — Gibson, Dunn & Crutcher and Skadden, Arps, Slate, Meagher & Flom — as its legal advisers for the effort.

Finally, given the events of yesterday and HP’s history as one of Silicon Valley’s most important companies, it’s worth listening to Léo Apotheker’s explanation for all this in full.

I recorded the conference call, and was particularly struck by, at the beginning, the detail of his explanation of all the many moving pieces. It’s a statement that lasts about 15 minutes. I’ve trimmed that from the recording of the full call and embedded it below.

One thing is clear: For better or worse, it is the start of a process that will lead to an entirely new HP.

Leospeaks81811 by ahess247

Related posts

• Hewlett-Packard Says Goodbye to PCs, webOS
• HP Pulls Plug on webOS Hardware, Leaves OS Future in Doubt
• HP And webOS: But They Seemed So Happy Together!
• Liveblogging HP’s “Everything Including the Kitchen Sink” Conference Call
• HP’s Apotheker: We Struck Out with WebOS, but Maybe Someone Else Wants a Swing?
• Viral Video: Like Palm’s Creepy Naked Lady, TouchPad’s Floating Celeb Heads Get the HP Boot
• Licensing webOS May Not Be Much of an Option for HP
• Hewlett-Packard’s PC Business: What Happens Next?
• Worth More Dead Than Alive: Could HP Turn a Profit on Palm’s Patents?
• With HP’s Raising of the World’s Biggest White Flag, Will Jon Rubinstein and Todd Bradley Surrender Too?

Joe Hayashi, VP of product management for webOS, left the company in March for the VP of marketing gig at Numenta, a machine learning start-up led by Palm founder Jeff Hawkins and former Palm CEO Donna Dubinsky.

Hayashi’s exit comes at an inopportune time for Palm, which is gearing up to launch its new tablet, the TouchPad, and extend its webOS platform to other devices and form factors, including the PC. He’s been with Palm since 2009 and has been one of its public faces recently. In fact, he was onstage in Barcelona last month talking up webOS at HP’s App Developer Conference at Mobile World Congress (see video below).

Hayashi’s departure is clearly a loss for Palm, though the company has already replaced him with Lee Ott, formerly senior director of local at Yahoo. Still, coming as it does after some other notable exits, it has sparked renewed concerns that the Palm unit is having trouble holding on to its talent. “I worry about brain drain over there,” a source close to the company told me. “I hope they can keep it together long enough for their tablets to potentially gain some traction in the market.”

PREVIOUSLY:

• Palm Developer Program Leaders Wave Goodbye to HP
• Exclusive: Palm Loses Mobile Design Guru Matias Duarte to Google
• Apple Poaches Palm UI Designer Rich Dellinger

Dubinksy has a long and storied history at Palm and one that will soon end. According to a recent SEC filing, she will soon resign from the company’s board of directors. Seems the $100 million Elevation Partners invested in Palm last year gives it the right to designate an additional director for election to the company’s board. But the board prefers to maintain its current size, so rather than add a new director it will replace one. And Dubinsky volunteered her spot. Queued up to replace her: Rajiv Dutta, former President of eBay Marketplaces and Executive VP of eBay (EBAY).

Today, a panoply of prominent tech and Internet leaders is taking a very public stand against a controversial initiative before California voters, which would eliminate the current legal right of same-sex couples to marry.

Forming a group and taking out a full-page ad in the San Jose Mercury News tomorrow, the execs hope to convince voters to reject Proposition 8, which is titled “Eliminates Right of Same-Sex Couples to Marry.”

Silicon Valley has had a long history of supporting gay rights. And recently, Google (GOOG) Co-Founder Sergey Brin has made a strong statement opposing Proposition 8, while Apple (AAPL) gave $100,000 to help defeat it.

The honorary co-chairs of “Silicon Valley Leaders Say NO on Proposition 8″ include: Brin; Bill Campbell, Chairman, Intuit; David Filo, Founder, Yahoo; Chuck Geschke, Founder and Chairman, Adobe Systems; John Morgridge, Former CEO and Chairman, Cisco Systems; Pierre Omidyar, Founder and Chairman, eBay; Sheryl Sandberg, COO, Facebook; Eric Schmidt, CEO, Google; and Jerry Yang, Founder, Yahoo.

In a statement in a press release set to go out this morning, Yang said: “Silicon Valley has always been an example for the rest of the country of how diversity and openness help to drive innovation and value creation. This divisive measure is the antithesis of those values that make Silicon Valley so unique.”

An ad the group–which also includes star venture capitalist Mike Moritz of Sequoia Capital, as well as Palm Founders Donna Dubinsky and Jeff Hawkins, and many others–is putting out tomorrow in the Mercury News reads:

Silicon Valley Leaders Urge You to Stand for Equality.
Vote No on Proposition 8.

As Silicon Valley leaders, we are committed to equality and fairness. We are opposed to Proposition 8 because it would change our state constitution to take away rights from one group of people. It would set our state, and our country, back in the fight for fundamental fairness and equal rights.

Please join us by reaching out to friends and neighbors and asking them to stand for fairness: Vote No on Proposition 8 on November 4th.”

(The ad and a longer list of tech leaders opposing Proposition 8 is below.)

If passed by a majority of voters, the California Constitution would be amended to include a new section stating “only marriage between a man and a woman is valid or recognized in California.”

Earlier this year, the California Supreme Court held that same-sex couples have a constitutional right to marry under the state’s constitution.

Former California State Controller and former exec at eBay Steve Westly noted that his own interracial marriage was once illegal, which is one of the reasons he was opposing Propostition 8.

“It really is the civil rights issue of the day … people stood up and fought for people like me and now it is time to stand up for others,” said Westly, who was an early supporter of gay marriage and is said to be eyeing a run for governor of the state. “While this is a polarizing issue, it is mind-boggling to me not to support the right of any two adults who love each other to marry.”

One thing is certain–the issue is indeed polarizing. Currently, the vote on Proposition 8 is very close, and a huge amount of money–more than $60 million–has been spent by both sides in the battle, which is considered one of the most contentious and high-profile in the nation.

Here is the ad (click on the image to make it larger):

LEADERS (partial list):
Deborah Barber, Principal, Jackson Hole Group
John Battelle, Chairman and CEO, Federated Media
Larry Birenbaum, Former Senior Vice President, Cisco Systems
Lorna Borenstein, President, Move
Larry Brilliant, Executive Director, Google.org
Owen Byrd, President, Byrd Development
John Chisholm, Chairman and CEO, CustomerSat
Barry Cinnamon, CEO, Akeena Solar
Tod Cohen, Director of Government Affairs, eBay
LaDoris Cordell, Administrator, Stanford University
Sue Decker, President, Yahoo!
Jack Dorsey, Chairman, Twitter
David Drummond, SVP, Corporate Development & Chief Legal Officer, Google
Donna Dubinsky, CEO, Numenta
Alan Eustace, SVP, Engineering and Research, Google
Naomi Fine, President & CEO, Pro-Tec Data
Rachel Glaser COO/CFO, Reunion.com
Carl Guardino, President and CEO, Silicon Valley Leadership Group
Andre Haddad, CEO, Shopping.com
Jeff Hawkins, co-Founder Palm, Handspring, and Numenta
David Karnstedt, Investor
Scott Kaspick, Managing Director, Kaspick & Co.
Steve Kirsch, Serial Entrepreneur
John Koza, CEO, Third Millennium
Ross LaJeunesse, Head of State Policy Western US, Google
Gary Lauder, Managing Partner, Lauder Partners Venture Capital
Laura Lauder, General Partner, Lauder Partners Venture Capital
Len Lehman, Investor
John Luongo, Former CEO, Vantive Corporation
Roger McNamee, Managing Director & co-Founder, Elevation Partners
Ken McNeely, President, AT&T California
Michael Moritz, Partner, Sequoia Capital
Susan Packard Orr, CEO, Telosa Software
Randy Pond, Executive Vice President, Cisco Systems
Amy Rao, Founder & CEO, Integrated Archive Systems
Jana Rich, Managing Director, Russell Reynolds
Miriam Rivera, Former Vice President and Deputy General Counsel, Google
Dan Rosensweig, Investor
Dan Rubin, Partner, Alloy Ventures
Hilary Schneider, Executive Vice President US Region, Yahoo
Len Shustek, Chairman, Computer History Museum
Jeff Skoll, Former President, eBay Inc.
Stephanie Tilenius, SVP, eBay North America
Joy Weiss, President and CEO, Dust Networks
Steve Westly, former California State Controller & former SVP eBay
Evan Williams, CEO, Twitter

[UPDATED on 11/05/08] In the interest of full disclosure, I am obviously not a supporter of Proposition 8. And, after I wrote this piece and hours before it passed last night, I got married in California under its recent same-sex marriage law, which the initiative has now overturned. It is still legally unclear what that will mean for people like me who married before Proposition 8 was passed, as it is not retroactive; as of now, the marriages remain valid. In any case, please see this disclosure related to me here.

I’m going to use my $100 rebate I get from the I-had-to-have-it-before-my-brother iPhone to get one! And I’ll even have a dollar left over for a refreshing can of soda.

Watch Colligan explain here:

Hopefully, the Centro will do a little better than Palm’s Foleo, which was demoed at our D5 and was dumped before the launch.

And, as an added bonus, here is that Foleo demo video by Jeff Hawkins:

Hawkins showed off the device, pictured here, which was supposed to go on sale this summer for $499, at D5 for the first time. It was greeted with less than enthusiastic acclaim by the elite tech crowd. The problem: Too large and heavy for so few features.

You be the judge after you see the video, but our own live blogger John Paczkowski even suggested at the time that it might get the unfortunate moniker “Fooleo.”

Given that Palm will be taking a $10 million charge for Foleo’s cancellation, that prediction looks pretty accurate now.

By way of background, D: All Things Digital, the annual tech and media conference Walt Mossberg and I host, has been sold out with a long wait list every year we have put it on.

That has meant only a few hundred people can see the interviews and also demos we do live onstage with some of the tech and media industry’s most interesting and important players and products.

The lineups have included Microsoft’s Bill Gates and Apple’s Steve Jobs, as well as Eric Schmidt of Google, IAC’s Barry Diller, Meg Whitman of eBay, Cisco’s John Chambers and many others.

And we’ve demoed stuff like the Treo when it first came out, as well as digital toilets, Wi-Fi phones and much more.

We usually post the photos and videos of the interviews and demos six or more months after they take place on a separate conference site. This year, our Digital Daily’s John Paczkowski liveblogged and also posted video highlights from all of the sessions immediately on our newly launched site here.

Now, we are posting videos of every session of the 2007 conference here, in full, and we have made all our photo galleries, hosted by SmugMug and mostly shot by our fabulous Asa Mathat, public too. You can also access our videos via the site’s master player here.

Every day, I am going to highlight a different interview or demo from the conference.

Here’s the Foleo, R.I.P.:

I think it’s probably the most disappointing product I’ve seen in several years. To think that anyone would carry something with a 10-inch display at 2.5 pounds as an adjunct to a phone just doesn’t make any sense to me.”

–Gartner analyst Todd Kort

Maybe the Foleo wasn’t Palm founder Jeff Hawkins’s “best idea ever.” This afternoon Palm said it is scrapping the Clio-esque “mobile companion” that it launched with great fanfare in late May. “In the course of the past several months, it has become clear that the right path for Palm is to offer a single, consistent user experience around this new platform design and a single focus for our platform development efforts,” Palm CEO Ed Colligan wrote in a post to Palm’s blog. “To that end, and after careful deliberation, I have decided to cancel the Foleo mobile companion product in its current configuration and focus all of our energies on delivering our next-generation platform and the first smart phones that will bring this platform to market.”

An astonishing turn of events, really. The $499 device was scheduled to ship in summer 2007. And Palm was insisting it was on track to do so as recently as Aug. 24. Apparently, the company decided it was better off taking a $10 million charge to earnings for canceling the Foleo than launching it in a market that has questioned its viability since the day it was announced. “I think Palm was wise enough to pull back when all the signs were indicating negative,” analyst Kort told IDG. “If they would have poured a lot of resources into this and failed, it could have dragged the company down pretty quickly.”

There is a third business that I’ve been working on but I’m not going to tell you what it is. It’s in mobile computing. It’s something different and it’s in its early stage. We have three businesses at PalmOne. One you don’t even know about, which is just a child. Another is the teenager and the other one is the mature 45-year-old. … Not really. I’ll give you a couple of clues. I always think of mobile computing as personal computing. This long-term vision has led us through everything–first the organizers and now through the smart-phone space. It’s like everything a personal computer is. Continue down that path. What are the implications of a world where everyone has a super high-speed Internet connection in their pocket and many gigabytes of storage, superfast processors, audio, visual and multimedia? What are the consequences of that? How will that change computing when you have all that stuff available to you all the time? I try to think into the future.”

–Jeff Hawkins interview, Silicon Valley/San Jose Business Journal, July 8, 2005

And here, nearly two years later, is the future to which Hawkins referred, the Palm Foleo (critics will inevitably dub it the “Fooleo”). Palm bills this as the mobile companion to its Treo smart phone, noting its 10-inch screen and full-size keyboard for reading and editing email and other documents received on a cellphone.

The Foleo also acts independently as a computer, with a Linux-based operating system for creating new applications. In partnership with DataViz and Opera Software, Palm hopes to show how easily new technology and applications can be added to the Foleo. It has Web search and browsing capabilities via Bluetooth and Wi-Fi, along with editing capabilities for Word, Excel and PowerPoint, plus a PDF viewer. The device has an “instant-on” feature, meaning users push a button and the Foleo is ready, without a boot-up period. It weighs 2.5 pounds.

The mobile-phone companion will be available in the U.S. this summer. Palm expects the price to be $499, after an introductory $100 rebate.

• 10:35 a.m.: Some background on the Foleo from creator Jeff Hawkins: “If the smart phone is a truly capable computer and billions of people have them, some of them are going to need a larger display. Smart-phone screens are just too small. People need a mobile companion, a device that extends their smart phones.”
• If you are a heavy smart-phone user, Hawkins says, Foleo makes your life a lot easier. You charge it overnight and use it all day long (like a Newton!)
• No hard drive. Semiconductor based.
• 10:40 a.m.: No cramped keyboards here. Full-sized only. Hawkins says it’s the smallest computer ever made with a full-sized keyboard.
• 10:45 a.m.: True on/off. No boot-up time. No sleep. “Just like the Clapper,” says Walt.
• Side note: Hawkins is extraordinarily tall. He looks likes Manute Bol next to Walt and Kara.
• Future iteration of the device will allow email over Wi-Fi.
• 10:50 a.m.: Uh-oh. Technical problems. Hey, I know, let’s talk about the scroll wheel for a while!
• Hawkins: “Once you’ve used Foleo’s scroll wheel and you move to another laptop, your thumbs will be looking for it.”
• 10:55 a.m.: How does the device handle email attachments? Pretty well, apparently. Native formating retained. All native. Documents and spreadsheets can be created from scratch. Device can display PDFs and Powerpoint docs, but it cannot edit them.
• Linux OS allows new applications to be developed quickly.
• Applications run full-size all the time. Essentially, it’s a modal device. There’s no task bar, and you switch between applications via the keyboard.
• 11 a.m.: Device runs Opera browser. Doesn’t do video, though. Will it ever? Hawkins says it will someday, it just doesn’t do it well enough right now.
• Foleo doesn’t have a cellphone radio, so it’s not carrier dependent.
• Foleo will support Palm and Windows Mobile. Hawkins wants it to support RIM and iPhone as well, but hasn’t inked the deals necessary to do that yet.

But how similar is this to Vadem’s ill-fated Clio? Hopefully, it won’t end up mimicking the legendary undoing of this defunct device.

More coverage at The Wall Street Journal.

So here’s one of my movies to show you how we prepare for the annual conference, which is highlighted this year by a joint interview with Microsoft’s Bill Gates and Apple’s Steve Jobs, the twin icons of the tech industry.

We’ll kick off the conference tomorrow night with an interview with Sen. John McCain, who is in the race to become the Republican nominee for president of the United States. We will talk to him about that, as well as the war in Iraq, but also hope to discuss a plethora of digital issues with him. McCain is one of the few politicians who knows a thing or two about the media, telecom and Web sectors.

Other interviewees on Wednesday and Thursday include: Microsoft CEO Steve Ballmer; CBS CEO Les Moonves; News Corp. President Peter Chernin; Cisco CEO John Chambers; former AOL CEO Steve Case, who will talk about his new company, Revolution; famed director and producer George Lucas; Time Inc. CEO Ann Moore; Google CEO Eric Schmidt; YouTube founders Steve Chen and Chad Hurley; Philippe Dauman, CEO of Viacom; and space tourist (and former Microsoft exec) Charles Simonyi.

We’ll also have demos from tech players like Palm legend Jeff Hawkins and others. And we are also excited to have singer/songwriter Jill Sobule, who will perform several times throughout.

We’ll have full coverage of D5 on our site, starting tomorrow night, including liveblogging by Digital Daily’s John Paczkowski, pictures, video excerpts and more.