Interview With a Short-Seller

We're short Palm (PALM Quote) right now, based on the Treo Smartphones. It's a nifty product, but that's all they have. They lose money on their PDAs. And you have Samsung, Nokia (NOK Quote), Sony Ericsson and everybody looking to have their own product like the Treo. The biggest problem is that Palm doesn't control the Treo software -- it's just a box. Boxes with chips in them tend to be very good shorts if that's all they are.

What about Apple and the iPod?

There's an argument that the link between iPod and iTunes is a razor/razor blade model, which we're careful to avoid as shorts. Apple (AAPL Quote) may have a reasonable business model on that.

What about Research In Motion and the BlackBerry?

Research In Motion (RIMM Quote) has the software. It trades at a higher P/E multiple than Palm, but I'm not short RIMM because RIMM has its own system in the BlackBerry. If the system does become the standard, you've got a monster on your hands. I know Treo won't be a standard because it's only the hardware.