“Palm may be on the way back to profitability, but it has serious challenges ahead as wireless convergence looms, according to a new report. In the report, Strategic Challenges In The Future Market For Handheld Devices, Denmark-based analyst firm Strand Consult predicts that Palm and Handspring will be crushed between the financial clout of Microsoft and the entrenched distribution networks of mobile phone manufacturers, once the focus in the PDA market shifts to wireless-enabled devices.” Read the rest of the story at ZDNews.
Palm, Handspring Doomed by Wireless?
2002-03-28 Wireless 8 Comments
More analyst predictions… god imagine what the world would be like if we didn’t have analysts to give us their findings.
That said, wireless enabled devices are nice, but not everybody wants it. I love my Palm and I love my cell phone. I’m glad their not the same unit, and you can get into some serious trouble when powering on a cell phone during a plane flight to look up somebody’s email address, write an SMS message, or check an appointment.
MS has been in the PDA arena for a while and quite frankly, they still suck at it. They are gaining mind and market share, granted, but it’s taken a while for it to occur and I doubt they’ll kill Palm or Handspring in a year.
And I don’t know what these people think, but Palm and Handspring had/have wireless enabled devices. Think VisorPhone and think Palm VII/VIIx units.
“MS has been in the PDA arena for a while and quite frankly, they still suck at it. They are gaining mind and market share, granted, but it’s taken a while for it to occur and I doubt they’ll kill Palm or Handspring in a year.”
I think it’ll take at least 2 years, but ms will do it. Look at most of the new pda sales, its the higher end ones, and even a palm lover (I have a palm) has to admit that in the $450+ range ms wins. They do more, have better displays and are all around just snazier. And now audiovox is releasing some ms handhelds that go for around $300, and beat palm ones going for $100 more (I can’t remember the model but its a pruned down compaq, with 16 megs of memory instead of 32 and I’ve seen it online for around $300, meanwhile the best palms aren’t as fast and they don’t offer as much memory, and handspring is basically a me-too palm, just with mac support out of the box).
It really seems like these guys have done their homework (for a change) and are offering very valid reasons why Palm/Handspring is going to get crushed by Nokia, mainly.
The new combination phone/PDA units that are starting to come out like the Texas Instruments model that uses the Microsoft platform and the new Nokias that use the latest killer Symbian OS are really impressive, with usable color screens and versatile software capabilities. The advantages of having your ‘PDA’ connected to the internet 100% of the time, and always on, are just far too great for this to fail, IMO.
With the massive distribution networks that Nokia, Sony/Ericsson, Samsung, Motorola, etc., etc., etc., have in place and the fact that the telcos can afford to offer more competitive pricing on their units than Palm can by essentially ‘dumping’ their hardware into the market at low profit margins, in order to sell services (like email, IM, browsing and Java stuff), Palm just doesn’t stand a chance. Also, Palm’s platform is too limited and they are not innovating their OS nearly as fast as Symbian and Microsoft are, which is a big problem (we’ll see if the Be acquisition changes this).
You might want to check out http://www.infosync.no/ for more technical details on these new PDA-phones.
Actually strand misses some very important points
1) For starters, the symbian alliance is about as stable as OPEC. Not everyone in there is thrilled about the weight that nokia gets to pull around. That means that certain symbian partners are likely to be quite happy to support other OS’s as well.
2) The cell phone industry is changing. Market shares will likely fall (particularly in the case of nokia) and we’ll see greater market share by a large group of smaller players. These players will not necessarily want to support their competitor’s cause (aka symbian).
**3)**** This is the most important one and what Strand should have picked up. Operators will not have terms dicatated to them by any OS vendor or any two OS vendors. Everyone has seen what happens when you create a Microsoft. Operators are not interested in perpetuating MS’s lead and they are equally disinclined to creating Symbian into the next MS. Operators will follow a “kissinger” doctrine of destabilization towards the OS. They want competition and no dominant player.
4) As far as innovation is going handspring is at the top of the wireless world already. They are not going away. There are plenty of investors who will support that company. One is a little outfit called Qualcomm.
5)Be cynical. Europe is going to great lengths to claim their “wireless superiority”. Anyone that challenges that (like handspring) will get slammed by the European press. Be very critical of the source you read. Europe desperately wants W-CDMA and 3G to be the next GSM and they are deeply concerned regarding the role that silicon valley could play in devices. After all, silicon valley knows computing a lot better than nokia, ericsson, siemens etc.
***”That said, wireless enabled devices are nice, but not everybody wants it. I love my Palm and I love my cell phone. I’m glad their not the same unit, and you can get into some serious trouble when powering on a cell phone during a plane flight to look up somebody’s email address, write an SMS message, or check an appointment.”***
You have some serious misconceptions about what a wireless PDA or a smartphone is, and how it works. You do not need to “power up” your cell phone in order to look up email addresses, etc.: the wireless functions and the PDA functions are quite discrete – one does not have to have both turned on at the same time.
I, for example, have a Kyocera 6035 smartphone. If I am on an airplane, I can turn off the Sprint cell phone function so it no longer sends out a wireless signal, thus making the airline happy. But I can continue to use the device as a Palm organizer, looking up addresses, writing notes, playing games, etc.
The wireless and the Palm functions are well thought out, are modular, and work well together (for instance, one can dial a number by tapping on it in one’s Palm address book), or seperately, as and when one needs them to.
It’s a much better deal (for me, at least) to carry one device that works well in both functions than to have to carry two devices that are incapable of working together at all. There is a symbiosis which occurs when you have a single device doing both functions which you cannot get when you have two separate devices doing two separate functions.
I predict that within 5-10 years, you won’t be able to get a plain, non-wireless PDA, except at the very bargain-basement, entry level price range of the market. At the very least, PDA’s will begin to have 802.11 or Bluetooth as a standard for talking to other devices or hooking up to local networks. 3G phones will of course be everywhere, but I would not write Palm or Handspring out of this market so quickly as this article does.
The only interesting thing for me to watch for will be to see how the market segments along the wireless PDA/smartphone divide. In other words, what part of the market will prefer a data-centric PDA device which accesses 3G and other wireless networks, and what part of the market will prefer devices which work and act like cell phones, but which also have PDA-like functionality.
I think the reason that cell phones sell so much is that you get one free (or for under $50.00) when you sign up for new service. Through my company’s plan, for example, I get a new cell phone every year for free.
Another problem is that wireless companies only let you use their phones. I would like to be able to buy what I want and have them plug in their little chip instead of being limited to what they wish to offer.
Now on to a new topic:
I bought a Sharp Zaurus PDA in Japan about 10 years ago (or rather somebody gave me one). It was a killer PDA. It had character recognition, displayed Japanese characters (of course), had all kinds of applications, dictionaries and games for it and was about half as thin as the first Pilots that USRobotics put out. It was made a lot sturdier too. It came with a telescoping stylus to keep things small and still works great today (I have had 3 palms during this time that have died on me).
Sharp has released a developer edition of its upcoming Embedix/QT/Java based. It looks great. I plan on purchasing the regular version as soon as it’s released (due to it having twice the memory). We use iPaqs running CE at work. They just can’t compare.
>>MS has been in the PDA arena for a while and quite frankly, they still suck at it.<<
Sorry, Charlie. My I-paq blows away anything the competition has to offer. I don’t know what you think they “suck at”.
Flawless interoperability with MS Office Applications – that most of the world uses every day?
Administering a 2K network via wireless connection with a terminal services client?
Keeping track of my travel expenses with a Money client?
Being able to store a gig of MP3’s on a microdrive, and then connecting the audio out to my car stereo while stuck in traffic on I-95?
Taking voice memos?
Reading .pdf Documents?
Playing Donkey Kong when I’m bored with Mame CE?
Working with a SQL server database?
Should I go on?
>1) For starters, the symbian alliance is about as stable as
>OPEC. Not everyone in there is thrilled about the weight
>that nokia gets to pull around. That means that certain
>symbian partners are likely to be quite happy to support
>other OS’s as well.
I doubt that, None of these companies want a repeat of the PC industry so don’t want to use MS software. Palm doesn’t have anything to offer right now and wont any time soon.
>2) The cell phone industry is changing. Market shares will
>likely fall (particularly in the case of nokia) and we’ll
>see greater market share by a large group of smaller players.
Why? Making a smartphone isn’t just a case of plugging a phone into a PDA, it’s much more complex and very expensive, if anything I think the big players are likely to grow. They have the money and the deals with the operators.
>These players will not necessarily want to support
>their competitor’s cause (aka symbian).
True, but what else is there? They could deal with MS but their usual technique is to stuff in the features as fast as they can and this leaves big, slow, buggy systems. Thats fine on a PC but Phones run on small CPUs and batteries and people don’t expect them to crash.
>**3)**** This is the most important one and what Strand
>should have picked up. Operators will not have terms dicatated
>to them by any OS vendor or any two OS vendors. Everyone has
>seen what happens when you create a Microsoft.
>Operators are not interested in perpetuating MS’s lead and
>they are equally disinclined to creating Symbian into the
>next MS. Operators will follow a “kissinger” doctrine of
>destabilization towards the OS. They want competition and
>no dominant player.
Why should the operators even care about the OS?
They just want to sell calls and phones. Which OS is irrelevant.
If anything a single OS makes things simpler to sell so they may actually welcome Symbian.
>4) As far as innovation is going handspring is at the top of
>the wireless world already. They are not going away. There
>are plenty of investors who will support that company. One
>is a little outfit called Qualcomm.
Handspring are doing the right thing but think volume:
Palm sell 7 million a YEAR, Nokia sell 5 million a WEEK!
The big 5 can price Handspring out of the market if they wanted to, it’ll get interesting coming up to christmas this year (In Europe at least).
>5)Be cynical. Europe is going to great lengths to claim
>their “wireless superiority”.
Ehe? Japan is years ahead of everyone. 3G is still a couple of years away for most of Europe, It’s already on sale in Japan.
It’s international actually:
Shipped in Japan, developed in Sweden based on technology developed by Qualcomm which they in turn got from the US military…
>Anyone that challenges that
>(like handspring) will get slammed by the European press. Be
>very critical of the source you read. Europe desperately wants
>W-CDMA and 3G to be the next GSM and they are deeply
>concerned regarding the role that silicon valley could
>play in devices. After all, silicon valley knows computing
>a lot better than nokia, ericsson, siemens et
It’s not about computing, it’s about combining Phone tech with consumer tech. Thats why the phone companies are getting partners, no one really knows how to make a good 3G device and so you are getting new companies like Sony-Ericsson which combine both.
The fact the markets are so different confuses matters highly, Europes standardisation allowed a lot of advancement and co-operation between different operators. This hasn’t happened in the US so you can’t send SMSs between different networks or roam very well. Handspring have a ready market waiting for them there, breaking into European phone market may be a different ball game though.