News Review: PDA Wars hot up.
The PDA Wars hot up as Palm posts reduced
revenue, cancels an acquisition, and Compaq sells iPAQs
like hot cakes. Will Microsoft win the battle of
the handhelds ?
Palm have announced reduced revenues expected for
the first half of 2001 (i.e. halved !), and has also
pulled out of it's proposed acquisition of the mobile
systems company Extended Systems Inc. So where does
this leave the PDA war ?
Currently, there are 3 main contenders in the
"keep it in your hand" arena. Palm were,
arguably, the first to break into this market, and
now have licensees like Handspring selling
competitive products which use PalmOS.
Secondly, there was Psion, who sell
keyboard-supplied systems, and do a lot of work with
embedded systems - remember the Ericsson mobile
phone/organiser ? Psion is not as visible in the
maket as Palm, and not as big.
Then there is giant Microsoft, selling the Pocket
PC (i.e. the Windows CE operating system, having been
re-branded). Up 'til now, PocketPC has been in the
minority, with people like Casio and the HP Jornada
being the only real users of the OS. Then Compaq hit
the streets a year ago with the iPAQ. Suddenly iPAQs
are the new designer toy ("but everyone has a
mobile phone, it's so common, don't you know
?").
Palm's Problem...
Palm have the problem of being a market leader in
what was a niche market, but it has suddenly become a
mainstream market. They have a huge installed base,
and lots of applications - FireViewer, iSilo,
PalmScape, City Map guides, Mailers, Spreadsheets
etc. You can use a Palm to connect to the Internet,
even as a remote DBA tool for managing Oracle
Databases.
One factor that Palm has blamed is the downturn in
the economy, which has meant that people have put off
buying "nice-to-haves". As a result, they
are currently over-stocked. But that's only part of
the story. The real issue is that suddenly PocketPCs
are eating into Palm's market.
The pressure is on, due in a large part to Compaq.
Palm need to innovate - fast.
And in the Compaq Camp...
Basically, the iPAQ is just COOL. The style is
what makes it, that semi-retro curved shape, the
silver-and-black finish, the 65,000 colours display,
all make for a great package. The cradle looks smart
on your office desk.
I currently own a Palm IIIc - the colour version,
which has something like 256 colours. It's amazing
how much clearer, sharper, and more up-to-date the
iPAQ looks.
Being Microsoft, the applications appear familiar,
InternetExplorer, Excel, WordReaders, PocketOutlook.
By capitalising on the familiarity of the Windows PC
desktop, they have been able to persuade people to
look at these little gadgets as a very simple
extension of the PC. People expect Hot-Synch to work
- it's all Microsoft.
As a result, Compaq are selling iPAQs faster than
they can manufacture them. They are not making much
money, since the margins are deliberately low to
bring the price down to within Palm levels
(notwithstanding, an iPAQ may cost you double a
Palm). As for getting a discount on an iPAQ - don't
even think about it.
So who will win ?
The battle is basically between PalmOS and
PocketPC. The key hardware vendors being Palm and
Compaq.
Most users of Palm or iPAQ, according to analysts,
are "home bought" - i.e. they have spent
their own money to invest in a hand-held, much as
they would have got a FiloFax in the past, and used
it for Office work as well as personal use.
Both systems are handwriting-recognition,
stylus-to-select-anything systems. Both have colour.
Both HotSynch via a docking cradle to your PC's
Outlook, and many other systems you may need. Both
are looking seriously at MobilePhone add-ones, which
would make your Palm or iPAQ into a fully-functional
mobile phone (including WAP, or - better still -
readable html internet browsing and useable mobile
email).
At the moment, Palm has the software packages, and
the installed user base. Compaq has the marketing
style, visual appeal, and the promise of simplicity -
important for a "home buy".
Now that the bandwagon has started rolling,
application writers are queuing up to write code for
PocketPC (using the cut-down versions of Visual C++
or Visual Basic which Microsoft have created). Palm
will have to watch out.
Reviewed by Dennis Adams in May 2001