Is Motorola the next Palm?

In the mid-90s, Palm and Motorola revolutionized mobility. Now, both are staggering. While their circumstances are vastly different, they have one important thing in common: They've failed to produce a consistent stream of innovative new mobile devices over time.

First, Palm revolutionized mobility with its PalmPilot, which was a quantum leap beyond paper DayTimers and the like that were popular at the time. A bit later, Motorola revolutionized the mobile phone business with StarTAC, the first successful small form factor clamshell phone.

Both devices became wildly popular. Palm owned the PDA market for years and StarTAC both made a fortune for Motorola and made it a leader in the mobile phone business.

Another similarity between the two companies is that they each had successful follow-on products that also changed the course of mobility. Palm realized early on that smart phones would replace PDAs and become a significant type of mobile device. So it acquired Hanspring, the company that was started by two of Palm's original founders and that developed the initial Treo smart phones.

Similarly, as the massive popularity of the StarTAC faded, Motorola loosed RAZR on the world. That launched the still-ongoing craze of ultra-thin mobile phones with whizzy interfaces.

The problem, of course, is that two major innovations in 12 years just doesn't cut it in the high velocity mobile world. While current Treos are somewhat slimmer and lighter than the originals, they're still considerably clunkier than most current flavor-of-the-month devices.

And Motorola foolishly thought the answer to its sagging fortunes was to release a seemingly endless series of new versions of RAZR. Instead of leading the market, it did a mediocre job of following itself. That, combined with a lot of boring (at best) phones in the rest of its lineup caused it to lose its edge among tech-savvy buyers.

Neither company shows any signs of getting its edge back. Motorola is splitting off its phone division, but that won't get it back on course. Only more imaginative product development can do that. And you don't hear the words "imaginative" and "Motorola" in the same sentence very often anymore.

At least Motorola has the resources to develop exciting new devices -- it just doesn't seem to understand how to do it. Palm remains a small company without the resources to keep up. Its Centro line of devices has been a modest success, and they're pleasant enough to use. But Centro isn't innovative or interesting enough to send Palm a flood of new customers. So the future of this company, once the darling of the technology world, is unclear, at best.

The business school lesson in all of this is that, for a company to succeed, innovation can't just happen once or twice. Particularly in high tech, a company needs both the culture of innovation, which Motorola seems to have lost, and the resources to innovate, which Palm never had.