Palm to Give Developers a Leg Up

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Palm to Give Developers a Leg Up
R. Krause - December 12, 2000

Event Summary

Palm, Inc. has announced "PluggedIn@Palm", a program aimed at helping Palm-based developers create hardware and software add-ons for the Palm OS and compatible handheld devices. Palm will help developers in all phases of product development:

  • Concept Phase - development kits

  • Development Phase - prototyping help

  • Production Phase - introductions to "preferred manufacturing" companies

  • Distribution and Marketing - third-party referrals

Palm-based devices hold a 70%-80% share of the handheld hardware and software markets. Key competition to Palm devices are "Pocket PC" devices, based on Microsoft's Windows CE (WinCE) operating system.

Palm says there are currently 100,000 registered Palm developers. Palm hopes this effort, in addition to helping current developers, will increase the number of developers producing Palm-based products. Many of the services Palm plans to provide are currently available through the program, but some tools will not be available for a few months.

Market Impact

We see Palm's move as primarily a way to strengthen their hardware and software offerings, delaying the "inevitable" rise of Microsoft's Pocket PC/Windows CE products in the market share battle. Palm still holds a tremendous lead over Microsoft in handheld devices (both hardware and OS). However, we don't believe any Microsoft competitor has an insurmountable lead - witness the current market positions of Netscape and Internet Explorer - and Microsoft's history shows it rarely, if ever, gives up when it wants a particular market or segment.

Competition from Microsoft notwithstanding, we view this as a smart move by Palm. A key way to get hardware and software developers to design for your product is to make it as easy as possible for them to do so. In the past, this meant giving away free copies of development kits. These days, it means helping developers in all phases of product development. The initial costs should be recouped fairly easily, as long as enough useful products result from the effort.

We expect this effort to take 6-12 months for positive results (i.e., products) to appear. It is difficult to get anything but the simplest products (hardware or software) ready for market in less than six months, but 12 months is within the reach of committed development teams. We expect any lasting effect on the market to take longer, around 12-24 months.

On a related topic: as companies move from a PC-centric mindset to a handheld/wireless-centric mindset, we expect Windows-based handhelds to increase in popularity. This is based on the assumption that mobile workers will want to have approximately the same apps run both on their desk and in their palm.

User Recommendations

While the announcement has immediate effect on Palm product developers, it is of longer-term interest to most handheld and palmtop users. The success of this initiative will, in part, help determine whether Palm can maintain its market share lead over Pocket PC/WinCE products.

In general, Palm users are happy with the product(s). Historically, Palm's biggest weaknesses have been their monochrome displays and their lack of wireless support. (We don't consider these to be big problems for older models, just weaknesses in a relative sense.) Palm and Handspring now have color and wireless-capable models. Although older monochromes can't be refitted with color screens, there are wireless upgrades available for older (non-wireless) models. Thus, we see most of the former "deficiencies" being overcome.

If you still decide you absolutely must have Windows compatibility, a WinCE model such as the Compaq iPAQ 3650 will be more to your liking.

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