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  1.    #1  
    Well, looks like MS is going to flop again in the PDA market...perhaps for the last time. According to this article: posted at CNET, Microsoft's handhelds aren't gaining ANY market share. While most of the current line of Pocket PCs are on backorder, it looks like this marks the fall of WinCE. Palm and Handspring products continue to far outsell MS based handhelds, and there doesn't seem to be any end in sight to that fact. Microsoft would be better off licensing software and services to other handheld and Smartphone makers like Palm and Samsung, rather than try to compete with them in the OS space. They always try to utilize the same licensing technique used with PC makers: License...then walk away! That doesn't work in a young market like PDAs. As the OS developer, you have to take charge of the entire development process...right down to how the hardware is designed and implemented. Instead of just letting HP, Compaq, and Casio do whatever they like with their designs. This leads to confusing arrays of processors, and hardware configurations that leave consumers scratching their heads.

    Now MS is trying a subsidy model by offering a $400 rebate for those who buy a Pocket PC and sign up for MSN Internet Access. I predict this plan will fail! It's unlikely consumers will be willing to commit to a 2-3 year contract just to get a free Pocket PC. These are handhelds for crying out loud...not PCs! I haven't seen much activity among consumers with the subsidization of PCs and Notebooks with the MSN subscription model. So why would it work with handhelds?

    The only real hope that MS has is to drastically get prices down to real-world levels. There are too many Pocket PCs selling at $400 and up. While the hottest growth in the PDA market is clearly growing at the low end, not the high end! In the end I think one or two more Pocket PC vendors will leave the field. Possibly Casio or HP. These OEMs just keep pumping out high-end handhelds where there is no demand, without ever giving any thought to low cost grayscale devices which could prove more profitable that more expensive color units.

    With all of their flailing about, I think this is the end of Microsoft in the handheld computing space. That's a tragedy too because this time they developed an excellent handheld that offers some rather innovative features. They just won't ever make it into the hands of consumers. The sad part is, none of these features will ever make their way into Palm or Handspring devices. I'm afraid that when Pocket PC dies...nothing will take its place. I for one don't want to go back to a electronic organizer! If the inevitable does happen, I may be forced to move over to the combination PDA/Smartphone. We'll see what happens there.

    Oh well, it's Friday. Maybe I'll have a beer and relax.


    "No matter where you go...there you are!"
  2. #2  
    Without rehashing a lot of criticisms about Pocket PC handhelds, you're right about the low end of the market being the hot zone. It's been said many times before, but $300 is the breakpoint for mass market appeal. First-time PDA buyers have to be able to convince themselves that they're not wasting hundreds of dollars for the equivalent of a $10 paper organizer.

    MS has more to worry about than Palm OS products. I think a lot of handheld OEMs are going to defect to Linux as their primary platform -- not because it's any better than WinCE, but because they don't have to pay licensing fees that cut into already thin profit margins, and they can add or take out features at will without Microsoft's consent.

    The iPaq and the Helio have Linux available. The Yopy will use Linux. And the PDA's that don't use Linux will probably use BeIA or EPOC.
  3. #3  
    The sad part is, none of these features will ever make their way into Palm or Handspring devices. I'm afraid that when Pocket PC dies...nothing will take its place.
    While I enjoy watching Microsoft finally fail at something (and being unable to buy the competition) I do agree that it would have been nice for the Pocket PC see just a bit more success...if just to provide some real competition to the Palm devices.

    That said, I don't think "palm" will be the only one out there. Handhelds are going to become more diverse and there will be much more choices in the future...ESPECIALLY with the advent of linux based PDAs. I also think the Palm OS will eventually evolve into different, multiple variations of itself to fit more specific needs.
  4. #4  
    Ok, Mr. Gates... listen to me... if you can't beat 'em, join 'em! Take that set of features that makes PocketPC so good and give it to us PalmOS folks. What I mean here is this: bring Office integration (Word, Excel, Outlook, etc) to the Palm platform. Let me sync desktop doc's and spreadsheets seamlessly and easily to my Visor and I'll be as happy as a clam. So you'll only make mere millions rather than billions... but you'll get a bunch of happy customers in the end!

    MarkEagle - Ice is nice!
  5. #5  

    Don't forget that Sun is going to GPL the next release of StarOffice, which handles Office 97/2K file formats with near-100% accuracy. Sooner or later, developers will be able to whittle down the filters to create an equivalent of Pocket Word/Excel/etc. for the Palm OS.
  6. #6  
    Here is text of an article from Infoworld about cell phones being the Palm/Pocket PC killer. However, I don't agree that a Cell Phone can replace a PDA like the VDX. I consider that the screen size of the VDX is the minumum that makes a PDA practical. I think Handspring has the advantage with the springboard concept. A cell phone/pager springboard allowing wireless internet connection without "clipping" service. Like what VDX users are doing today with getting email, etc. I haven't used this capability of the VDX yet, so I can't voice an experienced opinion. Granted, the VDX is not as "slim" as a normal cell phone, but it is not that unwieldly.


    Posted at July 21, 2000 01:01 PM Pacific
    [removed article]

    [This message has been edited by JHromadka (edited 07-30-2000).]
  7. #7  
    Schwartz is guilty of engineer-think: thinking in terms of what's technologically expedient, not what's convenient and practical for end users.

    90% of my friends with cell phones never use any feature on the phones aside from presets. How many people do you know that actually use text messaging and email? I know exactly one -- and he's in IT, which isn't representative of the average end user (Curiously, everyone at my office with a PDA has a Palm OS device, except for a single Pocket PC owner in our IT department. Do non-techies ever buy these things?).

    Cell phones are optimized for voice, PDAs are optimized for data. Just because internet functionality can be built into cell phones doesn't mean that people will use it. Cell phones have two interface problems that limit their usability as internet appliances: tiny screens and numeric keypads.

    A good form factor for a cell phone is not the same as a good form factor for a PDA. If you start designing phones that display more than 100 lines of text, the overall size of the phone becomes too large to fit in your pocket, making it unattractive. The Qualcomm phone/PDA, which was a flop, is a good example.

    But the Qualcomm at least accepted pen input. With regular cell phones, the situation's even worse: you have to enter text on a numeric keypad, which is unbearably slow. It shouldn't take 60 seconds to enter a note like "Take Fluffy to the vet." Cell phones may be bad as net appliances, but they're even worse as organizers.

    Convergence is overrated.

    [This message has been edited by Gameboy70 (edited 07-30-2000).]
  8. #8  
    I agree with both Bud and Gameboy70 re: Internet enabled cell phones not killing PDAs. However, I do think there is market for them; and I think that market may be huge. They work fine for basic messaging (more for receiving than for sending); and web browsing is not that different from the Palm VII PQA experience. It just happens on an even smaller screen, which is fine for short news stories, stock info, sports scores, etc. Like so much in wireless, what happens in Europe should be telling. Pricing is also going to be important, and I'm not just referring to the cost of the handsets.
  9. #9  
    Originally posted by Gameboy70:

    Convergence is overrated.
    Couldn't agree more. I also think this applies to certain springboards that are being released...Sometime...Soon...No, Really, We Mean it this time... .
  10. #10  
    Pocket PCs aren't dead and they won't be killed. People were paying over $1000 to get an iPaq and MS and the PocketPC manufacterers aren't going to overlook it. I don't think that the PocketPC will overtake Palm anytime in the near future, but MS has a good product that will give even more competition in its newest release. For all Palm users, I hope that PocketPC doesn't die out so that Palm is forced to continue innovating. There hasn't been a really new product since the Palm V. (I am not including the IIIc because it is in the PPC price range and sucks in comparison.) Palm has made some cosmetic changes and added more memory, but not until the release of the PocketPC did they make forward looking statements about wireless connectivity and now new models. The two will continue side by side for some time to come.
  11. #11  
    The iPaq will do well when it finally becomes available (for real) through retail channels -- and that success will come at the expense of the HP and Casio models, which I suspect will become the fifth and sixth OEMs to drop the platform.

    Microsoft doesn't control the success or failure of the Pocket PCs; the OEMs do. If their products don't sell, Microsoft's reputation for success will have no bearing. And Palm will continue to get plenty of competition from Handspring, and maybe even Psion.

    There's no reason to pay MS for a bloated OS when you can get an equally bloated OS -- Linux -- for free, which you can customize at will.

    Price is evidently not an object for people willing to drop a grand for a PDA on eBay simply because they couldn't wait for retail. Whether or not that's indicative of a mass market success remains to be seen.
  12. #12  
    While I don't think the PPC is dead, Microsoft continues to stumble . . .,00.html

    Thanks goodness for PeanutPress and the Palm OS!!
  13. #13  
    I couldn't disagree more with the statement that M/S is not responsible for the failure of the Pocket PC. Why do PPCs cost more the Palm O/S based devices? The the answer that has the most to do with M/S is the fact that to run PPC properly you need 16 MB of RAM, 16 MB of ROM and a 133 mhz processor. Now compare that to a Palm O/S device, where you can get by quite nicely, thank you, with a 20 mhz processore and 2 MB of ROM and 2 or 8 MB of RAM.

    The primary thing M/S could do to ensure the success of PPC is to make it a lean O/S. But if Windows 2000 or Windows 98 is any indication, that's definitely NOT a core competance at M/S.
  14. #14  
    Make that a 16MHz Processor! That's what the visor has (though it runs faster than the 20MHz Palm V because of OS updates by handspring!)

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  15. #15  
    The reason PPC is not dead is because this is a market that M$ can not ignore. Their problem is that they've done what IBM did with OS/2, released a solid product that is too resource intensive for its time. However, M$ is not like IBM, they are nothing if not persistent; and Moore's Law is on their side . . . Put another way, would any one here really pick the Palm Vx over the iPAQ PPC if the price delta was less than $100? What if the difference was less than $50?

    To counter this threat, Palm is going to ARM processors and color displays. Will it be enough if M$ can prevent Palm from offering transparent document (or spreadsheet or prsentation) portability between the desktop/laptop and the PDA? Of course, according to Handsprings' Jeff Hawkins none of this matters - just add cellular to his PDA Zen and you've got PDA Nirvana. This is probably true, but only as long as there is a healthy price advantage on your side. As soon as the price gap narrows, I doubt that folks will be buying into the less is more thinking of Hawkins.
  16. #16  
    And still more evidence of Palm's renewed complacency -
  17. #17  
    Uh, not that I approve of Palm's recent business moves (defending Palm against MS is like defending Clinton against Republicans) but exactly where in the article do you find "renewed complacency"? If anything it seemed that Palm was paranoid to begin with. Unless MS builds a new OS from the ground up, rather than scale down Windows legacy code, it will continue to fail -- with or without Moore's Law.

    Incidentally, the implications of Moore's "Law" (actually an observation) are often ignored. Sure, hardware will scale to make WinCE more affordable, but even in the unlikely event the MS adds no more code bloat, scalability benefits the competition as well.

    Put it this way: mainframes are still popular, despite the proliferation of PCs. Moore's Law affected mainframes as well as PCs, so that now the average mainframe is the size of a refrigerator instead of the size of a room. But PCs infinitely outsell mainframes.

    I think that same will be true of the Palm OS products relative to Pocket PCs. There'll be plenty of people willing to pay $150 for a Pocket PC with a ton of features, but there'll be infinitely more consumers out there willing to pay $50 for an entry-level Palm.

    Within a year, Pocket PC OEMs will probably break the $300 price point, but Palm will probably break the $100 price point.
  18. #18  
    Reread the end of the article. Palm does well through the end of June (record profits); and then assumes that all is well, and disolves the tiger team. They don't get it. M$ is like a zombie that you can't just kill once (or twice, or thrice, etc.), and assume it will stay dead . . . it is going to get back up, and keep coming after you . . . Hopefully there is alot more going on, and the article is just focusing on the marketing end of things (and hopefully on just one campaign in particular).

    Re: Moore's Law and component costs. Just how much lower do you think Motorola can take the price of this chip? This is a processor near the end of its life cycle, and its price can not fall much further. Meanwhile, the generation of StrongARM processors used in the PPC are just entering middle age (meaning that its cost can still come down quite a bit). Also, with new color LCD plants coming on-line, the cost for another key PPC component is going to be coming down alot faster than that of the grayscale screens favored by Palm and Handspring.

    Re: Price points - There is a price point below which the device will be perceived as "just old technology;" or, worse, it will be viewed as "cheap" (as opposed to inexpensive). This is not entirely rationale, but it exists in this market. Rather, I should say that it especially exists in this market.

    [This message has been edited by yucca (edited 08-11-2000).]
  19. #19  
    Palm should have dissolved the tiger team. There may be a danger in being oblivious to competition, but there's also danger in overreacting to it. The correct response would've been to analyze why Microsoft failed, and avoid making the same mistakes (e.g. battery-killing StrongARM processors).

    It should be clear from the Pocket PC's failure to gain traction -- despite brand recognition (Microsoft is the #2 most recognized brand in the US, behind Coke) and unlimited capital resources -- stems from fundamentally misapprehending what a PDA is. This is evident in the article when it mentions Microsoft's reliance on customer focus groups for direction.

    It always sounds like a good idea to ask people what they want in a product, but that doesn't necessarily tell you what they need. With handhelds in particular, there's a huge difference between what people say they want, and what they actually use. If you ask people if they'd like their handheld to play MP3s, of course they're going to say yes, but that doesn't mean they're willing to pay for that capability. I'll be the first to agree that Palms are bland, but there's a bigger market for bottled water than for wine.

    As far as Moore's law and the prices of the Dragonballs coming down, I think they can follow the asymptotic curve towards free like every other chip. x86 architecture has been at the end of the line for a decade, but it's more popular than ever, and PCs are cheaper than ever. As long as Palm OS licensees (esp. Handspring) have huge orders to fill, the Dragonball, or an upgrade of the basic architecture can be around indefinitely.

    I disagree with the perception of low-priced Palm being considered "cheap." As Jeff Hawkins said at PC Expo (in a different context), the real competition isn't other PDAs (especially PPCs), but paper organizers. My theory is that the potential market for PDAs is vast, if only because of the perception that PDAs are pretentious equivalents of Day Runners -- so PDAs will have to compete on price to be ubiquitous, like $5 calculators.

    [This message has been edited by Gameboy70 (edited 08-11-2000).]
  20. #20  
    To elaborate a little further, a price drop in hardware components -- processors, memory, lcd screens, etc. -- equally benefits ALL players in the PDA market, hence there is no competitive advantage to be gained by anyone by Moores Law (unless you'd like to argue that the perceived marginal cost to a customer between $50 and $100 is not important vs. the perceived marginal cost between $250 and $300 -- or some other "break water" price point). In any case, all other things being equal, a Palm O/S machine will run faster than a M/S Pocket PC machine. This IS a competitive advantage for Palm, Handspring, et al, as they can use a slower (i.e. less expensive) processor using less memory than a M/S PPC device and acheive essentially the same user perceived speed. From that perspective, M/S is culpable in their use of "bloat ware", and they are responsible for the higher cost of a PPC. However, M/S does have a competitive advantage with PPC, namely that they control all the desktop apps that everyone is attempting to get connectivity to with their PDAs. I think that with their most recent Outlook "fix" M/S is starting to lay the groundwork for exclusion of the Palm O/S or limit it's functionality to be connected to critical desktop items such as e-mail. Only time will tell. . . .
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