WSJ writes about how “hit by downturn, tech firms are forced into tough choices.” It takes the case study of Handspring which eschewed its line of organisers for the unhedged bet on the cellphone/organiser combo. So far, the gamble hasn’t paid off.
Handspring quickly discovered its old business habits didn’t work in the cellphone industry, where mobile-service carriers control retail sales and insist on lots of special customized features. And demand for combination devices was slow to materialize.
Sales of Handspring’s new product, the Treo, have been sluggish, with about 180,000 sold since January 2002. The global market last year for Treo and its rivals was $1.4 billion, according to International Data Corp. — compared with $3.1 billion for the old-style organizers that Handspring tossed aside.
It is a choice we all face as managers in tech businesses. On the one hand is a business which is stagnating but can provide steady business, on the other hand is the unseen future. Which path do we choose? (And choose we must.)