is preparing to ship their revamped Windows CE product line, the "new"
PocketPC, in an attempt to capture handheld device market share from PalmOS,
the current leader. The new devices are slated to ship sometime in April,
and will run Pocket Word (PWord), Pocket Excel (PExcel), and Pocket Explorer,
as well as sport a new graphical interface (code-named Rapier). Although
Microsoft "does not comment on unannounced products", it reportedly has
said that Hewlett-Packard, Casio, and Compaq will all produce PocketPC
a separate announcement, the Symbian consortium announced the late-2000
availability of its "Quartz" platform. Quartz reportedly will provide
Palm or CE-like functionality, but will be a zero-charge upgrade to suitably-equipped
digital handsets. Functionality is expected to include telephony, streaming
multimedia, Web browsing, and Palm-like computing. In addition, Symbian
plans to provide "quarter VGA" (i.e., 320 pixel x 240 pixel) color display
functionality. The devices double up as a conventional cell phone by plugging
in a headset, or wirelessly using a Bluetooth headset or ear clip. Bluetooth
will even allow the device to be left in a jacket pocket or briefcase,
with voice activation triggering the call.
While not a death-knell for Palm devices, this certainly isn't great news
for them. Although Palm presently holds an approximate 80% market share
for the handheld and PDA market, no one expects Microsoft to give up.
latest product set may not do to Palm what Internet Explorer did to Netscape,
but every time MS adds functionality at a low price, Palm will feel the
heat. At some point, price/performance will surpass brand loyalty as a
reason for buying a PDA. Of course, at $199 for a stripped down PocketPC
(i.e., no PWord or PExcel ), it is not yet a "price" sell. Pricing on
the PocketPC Professional (where you do get PWord and PExcel) is not set
at this time. Perhaps MS will tell the market that the added features
in the Professional are actually part of the OS, and therefore will cost
Quartz announcement is potentially more troublesome for Palm and Handspring
(maker of a lower-priced Palm-based handheld). For those customers with
the appropriate hardware, a zero-cost upgrade to something they already
carry around all the time is pretty attractive. As feature-packed telephones
(er, I mean "digital handsets") proliferate, the market for this functionality
will increase. Although the market for a separate PDA will not disappear,
consumers will question whether they need an additional device when one
will do all jobs. We expect this functionality will find its greatest
initial adoption among business users such as a company's external sales
Palm has started to work on its wireless offering, we think they should
keep pushing in that area. We think Palm (and perhaps Handspring) should
look at dropping prices to increase market share. We do not believe demand
for PDAs is inelastic, so striking now before PocketPC can gain a foothold
might be wise. And as far as loyalty to Palm: plenty of people were loyal
to Netscape, and WordPerfect, and VMS, and so on.
The newly-minted PocketPC pre-announcement sounds good, but customers
should wait 2-3 months before rushing out to buy one. Customers should
also verify that no translation software is needed to go from desktop
Word/Excel to PWord/PExcel - currently that situation is not clearly defined.
One potential upside is the quantity of hardware vendors signing up for
PocketPC devices. Although we give Microsoft credit for not giving up,
we sometimes wish we could find a market where Microsoft is not trying
to crush the competition.
find the Quartz possibilities intriguing. It is still too early to see
if Symbian will live up to the hype, but if it gets 80% of the way there,
the mini-Grail of "convergence" will be one step closer. Although we see
high upside potential for sales forces, we can see this model being extended
to any environment with a highly mobile workforce, especially that with
a high knowledge-worker percentage. Customers should not place large bets
on Quartz until it is shown to be as good as the hype.
Palm users might try to exert pressure on Palm Computing and Handspring
to have a "Quartz-like" offering (i.e., with lots of features) in advance
of Quartz's arrival. The Palm VII has wireless capabilities, but it appears
that Quartz will go beyond that.
addition, Palm might consider bundling free/low-cost Word and Excel translators
with their products. Customers can purchase various third-party Excel
and Word viewers, and Palm Desktop can run, or at least work with Excel,
but customers may decide they want more.
original Palm Pilot was highly focused, with the main point being that
it was not "all things to all people". Since time and market forces have
changed that mission, Palm will now need to keep up with feature-filled
devices. Even if PocketPCs have no more functionality than Palm, MS marketing/PR
will push them hard.