P.
Hayes - June 26, 2000
Product
Background
3Com introduced the Palm VII Wireless PDA in early 1999. The device initially
retailed for $599 (MSRP) USD with an expensive wireless monthly service
fee. In October of 1999 prior to the Palm spin-off, 3Com cut not only
the cost of the device from $599 to $499, but also lowered the cost of
service due to complaints from the end user population of exorbitant access
fees. The Palm VII is a logical wireless extension of the Palm Pilot platform.
The
Palm VII is a data-driven device allowing access to such information as
news, sports, weather, e-mail, driving directions, yellow pages, and various
other items. Palm does not offer users access to the world wide web (WWW)
via a browser, partly due to speed and bandwidth considerations and also
because data-driven devices appear to be the future of wireless appliances.
Users of the Palm VII can utilize 3rd party software to synchronize web
pages to their device.
Product
Strategy and Trajectory
The Palm VII occupies the form factor of a Palm III with the only differences
being a slightly elongated body, coupled with a 'flip-up' antenna. The
Palm VII comes with 2MB RAM and access to 20 web clipping enabled sites
which allows a user to get up to the minute news, stock quotes, sporting
news, instant messaging, yellow pages, people search and directions, among
others. When combined with 3rd party management and synchronization software
such as Puma Technologies Intellisync offering, the Palm VII can access
designated data on an organization's network.
While
the Palm VII is a 'cool gadget', it is not without shortcomings. The proliferation
of Wireless Access Phones and the introduction of the new PocketPC devices
make the Palm VII's days numbered. The resolution of the Palm VII's screen
leaves much to be desired; viewing even basic graphics is difficult. The
lack of memory expansion is a serious shortcoming when compared to Palm's
immediate competition, the Visor from Handspring, which is more flexible
and more cost effective in add-ons from memory to modems. Palm.net is
the service provider for the Palm VII allowing US Nationwide coverage
as shown in diagram 1. (Source: Palm, Inc.) Service in major metropolitan
areas is good, however in more rural areas the service is non-existent,
which is par for the wireless industry as a whole.
Diagram1.
Palm.net
has also improved its pricing plans for varying levels of service for
the Palm VII. There are four different plans available. A Basic Plan for
9.99 (USD) per month includes 50K of data access monthly, with each 1K
above the 50K an extra .20 cents. An Expanded Plan is 24.99 and includes
150K of data access monthly, while the Volume Plan is 39.99 monthly and
includes 300K of monthly data access. However, for an extra $5 a month
on top of the Volume Plan, a user can step up to unlimited data access.
Given
that both Wireless Access Phones and the Pocket PC will very shortly be
able to surpass the functionality that Palm VII has to offer for a far
lower total cost of ownership and service plan charge, we believe that
the Palm VII has become a dinosaur in the infancy of wireless device access.
Recent polls taken on the Internet have indicated tremendous interest
and momentum for the Pocket PC and a reduced interest in the Palm platform.
To add to the fiercely competitive PDA market, Research in Motion (RIM)
has just released the RIM 957 Wireless Handheld, a constantly connected
device with strong collaborative e-mail functionality. However, the global
proliferation of the Palm computing device will make a formidable adversary
for even the brightest new technologies.
Palm
is aggressively marketing the device as a utilitarian field tool. The
target markets are: financial - to provide up to the minute information;
military bases usage - to increase efficiency; fuel distribution - for
tracking and increased sales; and also the wide consumer market. With
the emergence of Bluetooth technology coupled with Palm's embracing of
the Wireless Access Protocol (WAP), we expect Palm to maintain, if not
extend its lead in the wireless PDA market with more advanced wireless
offerings.
During
Palm's initial public offering in early March. Palm shares tripled in
value the first day, briefly lending Palm a value in excess of 3Com, not
withstanding 3Com's ownership of 9.5 percent of Palm shares. Palm shares
have since subsided to $26 5/16, down from a high of $165.
Product
Strengths
Let's face it, the Palm VII is very cool. Having carried a test unit with
me everywhere, I found the device extremely useful. Not only does it perform
all the standard tasks of a Palm III or Palm V vis--vis e-mail, calendar,
address books and notes synchronization; but it also allowed flight booking,
information look ups such as directions, telephone numbers, and access
to company databases, at anytime from anywhere.
The
device is particularly strong in wireless sales force automation, allowing
constant access to the office, sales contact lists, calendaring, meeting
scheduling and data sharing, in addition to instant messaging to either
clients or colleagues.
Product
Challenges
Lifespan. What is the lifespan for a new product in today's rapidly changing
technologically driven market? For wireless devices it can be anywhere
from a matter of months to two years. We believe the Palm VII will outlast
the 24-month timeframe due to the immaturity of the Wireless Access Market
in the United States. Simply stated, U.S. users are 16 - 24 months behind
Europe and Asia in terms of wireless development, giving the Palm VII
an extended lifecycle within the U.S. One of the major shortcomings of
the Palm VII is that a manual connect is required, there is never a constant
connection to palm.net with the device.
Palm
will (and already has begun to) enable enhanced wireless in devices such
as the Qualcomm PDQ-1900, a wireless access phone combined with a Palm
OS. Once again, because the WAP device still does not maintain a constant
connection, the user must take some action to initiate data flow. The
integration of Bluetooth wireless technology, will most certainly change
the face of Palm wireless computing, as we know it today.
BOTTOM
LINE
Vendor Recommendations
Palm
should slowly remove this device from the market and introduce an enhanced
version of the unit, with a sleeker form factor, memory expansion capabilities,
and an active LCD screen for enhanced viewing quality. The device must
also come pre-configured to access an Internet or Corporate mailbox via
POP3, HTTP or IMAP. Synchronization with one's mail is nice, but to place
a fully functional inbox in your hand is absolutely necessary for the
successful evolution of Palm's handheld devices. We would further recommend,
given the proliferation of Palm devices, that Palm developers create management
software for IT administrators and support personnel to not only track
inventory, but also to access and track usage billing.
User
Recommendations
The Palm VII has never made a solid pitch for corporate usability and
viability and has therefore never received the success associated with
the Palm III and Palm V platforms. If you have either of these devices
and are looking for wireless access, you do not need to go to the Palm
VII platform, you can add a wireless modem, which will provide twice the
data speed of the Palm VII coupled with lower monthly access fees and
a larger supported coverage area for roaming users.
If
you have four or five hundred (USD) on hand and find the need to be on
the 'cutting edge' of technology, the Palm VII may be a perfect match
for you. However, we would recommend users wait 180 days for the advent
of the next phase of wireless offerings, which we believe will have significant
improvements over current wireless PDA technology.