Word: palme
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...Palm licensee Handspring has captured nearly 30% of U.S. retail PDA sales in the 12 months since its Visor line hit the shelves. The colorful, inexpensive devices were the first with expansion slots that allow users to add anything from a digital camera to an MP3 player--in effect to customize their PDAs. Co-founders Donna Dubinsky and Jeff Hawkins created the original PalmPilot before leaving Palm to start Handspring...
...long run, though, Palm's biggest threat may come from Microsoft, which makes the Pocket PC software platform for PDAs sold by Compaq, Casio and Hewlett-Packard. "Microsoft has tremendously deep pockets, and it seems to stick to things until it gets them right," says Palm CEO Carl Yankowski...
...wrong so far? Its Windows CE operating system, which has been around since the mid-1990s and powers Pocket PCs, claims just 10% of the handheld market. "Our initial attempts with these devices weren't that great," concedes Ed Suwanjindar, product manager for Microsoft's mobile division. Unlike the Palms, which won devotees for their elegant simplicity, Pocket PCs have been criticized for trying to cram in too many features. Such luxuries as a built-in MP3 player and high-resolution color screens have resulted in heavier, pricier offerings that start at $350--vs. $150 for an entry-level Palm...
...wild cards in the PDA market as well. Research in Motion has sold more than 700,000 of its BlackBerry wireless e-mail devices directly to corporations such as Goldman Sachs, Merrill Lynch and NBC. Jack Welch, Michael Dell and Al Gore are fans. This summer Sony's Palm-based Clie will get a snappy new upgrade, complete with a sharp color display and support for a new, secure digital music format. By leveraging resources from its music, gaming and audio-video divisions, Sony may be able to create the ultimate portable gadget. And now the first PDA phones...
...people saying, 'Oh, Sony's entering the market. It's over, pack your bags,'" she says. "But that hasn't happened." It's likely the market will become more segmented, with Microsoft and Research in Motion homing in on corporate users, Sony targeting upscale consumers, and Handspring and Palm attacking from all angles. But Palm still has the most to lose. "The onus is on Palm to continue to innovate in its design and operating system," says IDC's Slawsby. Let the hand-to-hand combat begin...