May 2002: The sale figures for March 2002 are in, and it appears
that all the "rumours of Palm's demise have been greatly
``The buzz has been that there's a lot of momentum for Microsoft
in the corporate marketplace right now,'' said Steve Baker, analyst
at NPD Techworld, a market research firm. ``But the sales numbers
that we're seeing don't support that.''
The conventional wisdom in the IT industry says; "that if
you stand in Microsoft's way you'll get run over". In fact
last year many industry pundits were ready to to declare Microsoft
king of the hill again, but the anticipated sales of Pocket PC
devices have just not materialized. So what happened?
Well, it may be true that Microsoft does rule the roost on the
desk top, but as they, and most everyone else in the IT biz, have
discovered the mobile market place is "Terra Incognita",
and here there be dragons.
The mobile market is a very different environment, with very
different requirements. What seems to work well on the desk top
will not necessarily "port over" well to the constrained
requirements of the mobile platform.
Power conservation, usability and screen real estate all play
a role. Microsoft's big mistake was to take a operating system
designed for the desk top and attempt to shoe horn it into to
a tiny gadget not much bigger than a deck of cards. In fact it
took Microsoft 3 attempts to come up with something that was even
modestly "mobile friendly".
"It's the difference between taking technology derived from
a PC and making it more energy efficient, and something that's
designed from scratch to treat power as a scarce resource,"
said Kyle Harper, business manager for Motorola's Wireless and
Baseband Systems Group. "There's a lot you can do when you
don't have a huge operating system footprint to deal with."
The one bright spot for the Pocket PC platform has been the Compaq
iPaq (now the HP iPaq). Over the last two years iPaq has enjoyed
a respectable increase in sales. "With the introduction of
the iPaq we went from basically zero up to about 10 percent market
share worldwide,'' said Rich Paxton, Hewlett-Packard's iPaq product
manager for North America.
The iPaq was the great hope of Microsoft, and it was seen as
the doorway to the enterprise sales. "However, events have
conspired to slow the Pocket PC's momentum. First, the economic
slowdown. While recession hurt everybody in the PDA market, including
Palm, a renewed focus on value (particularly
from enterprise buyers) favored Palm's lower-cost devices."
Says Carl Zetie, VP of Giga Information Group.
"Second, the HP-Compaq merger. Between them, Hewlett-Packard
and Compaq account for the lion's share of Pocket PC sales, especially
in the enterprise" said Zetie. Now that HP has officially
discontinued the Jornada line up in favor of the more popular
iPaq, it remains to be seen if the loyal Jornada users can be
converted to iPaq fans.
So with events seemingly favoring the Palm OS, are we ready to
declare a winner in the mobile space? Absolutely not! It would
be as much folly to to declare Microsoft dead as it was for the
IT industry's "cognoscenti" to start writing Palm's
What the current sales figures do tell us is: Microsoft may be
still a long way from making it to first base, but they do have
a strong team and the games have just begun.
Palm Delivers Lower TCO to Enterprises