3Com again changes name of hot-selling PalmPilot

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3Com Corp. is again changing the name of its hot-selling PalmPilot while at the same time suing Microsoft Corp. over the name of its new Palm PC.

3Com today introduces a new version of its electronic organizer under the name Palm III, marking the fourth name in the product's two-year history.

"This has got to be one of the worst orchestrated brand efforts in history," said Ed Colligan, VP-marketing of 3Com's Palm Computing division.

"A lot of it wasn't our fault, but the reality is it happened," he added. "We've been through a lot of changes ... In the end, the product's good enough and the marketing's strong enough that it hasn't really had an impact."

The handheld computer, which uses a pen-like stylus, began life as the U.S. Robotics Pilot after U.S. Robotics bought Palm Computing, the start-up company that conceived the device. Last March, facing legal action by Japan's Pilot Pen Corp., U.S. Robotics released an improved version dubbed the U.S. Robotics PalmPilot. The name was tweaked to 3Com PalmPilot after 3Com bought U.S. Robotics last summer. Now comes Palm III.

"Hopefully, this will be the last time" the name changes, said Mr. Colligan. "We can get this stuff behind us and focus on building the brand."

NO MORE NEW `PILOT' PRODUCTS

Mr. Colligan said 3Com settled with Pilot Pen and agreed to drop "Pilot" after the penmaker won a suit last September in France. Pilot Pen also was suing in Germany, Japan, the U.S. and U.K.; Mr. Colligan said 3Com likely would have lost the suit in Pilot Pen's home market.

Under the agreement, 3Com must stop using Pilot on new products but can keep the name through the life cycle of existing products; the PalmPilot Professional becomes the entry product.

PalmPilot's booming sales are a testament to the product and offer a lesson in how to design consumer technology: The pocket-size device, which starts at $299 for the Professional model, performs a defined set of tasks without cramming in unneeded technology or features. That has made PalmPilot the Volkswagen Beetle of electronic gizmos, landing the product cult status and making it almost a fashion statement among the digerati.

Sales of Pilot and Palm Pilot surpassed 1 million units last November, and analysts expect 3Com to sell 1 million more this year.

3COM AIMS TO SAVE `PALM'

Seeking to protect "Palm" and "Palm Computing," 3Com has filed suit in Germany and Italy against Microsoft, which stuck the "Palm PC" name on a category of similar devices announced in January using Windows CE software. 3Com also is suing Casio, one of a handful of electronics and computer makers developing Palm PC devices.

A spokeswoman for Microsoft said Palm PC is a non-trademarked category name.

"We don't believe we are infringing on their trademark rights," she said.

Mr. Colligan draws a distinction between Pilot Pen's case, involving products arguably in different categories, and 3Com's new case, involving directly competitive products from Microsoft's hardware partners.

"We feel that Microsoft is trying to confuse the market and trade off our success," he said. "They've blatantly copied the product, and to use the same name or reasonably close name is to us beyond reasonable business practices."

Copyright March 1998, Crain Communications Inc.

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