Pocket PC gains set stage forenterprise battle
by James Niccolai, IDG News Service\San Francisco Bureau
December 11, 2000, 10:44
New research sees Microsoft clawing back marketshare from Palm in
the handheld computer market, and analysts say the biggest battle
could be about to begin in the corporate playing field.
Figures to be published next month by International Data Corp. show
Microsoft's Pocket PC platform accounting for about 18 percent of
PDAs shipped worldwide in 2000, up from 13 percent last year. While
the gains appear small, they come in spite of the release of
Handspring's popular Visor computer, which uses the Palm platform
and snapped up almost a third of the U.S. retail market upon its
release.
Much of the Pocket PC gains were likely made since April when
Microsoft released its new Pocket PC Platform, analysts said. The new
design, used in Hewlett-Packard's Jornada and Compaq Computer
Corp.'s fast-selling iPaq device, fixes many of the criticisms leveled at
early Windows CE-based devices, which were slammed for being too
slow and feature-laden compared with Palm's simple, more elegant
products.
In particular, analysts have pointed to the Pocket PC's improved
battery life, bright color display, and support for considerably more
local storage than Palm-based devices. The Microsoft platform also
offers a range of familiar applications that synch easily with existing
desktop programs, including Pocket versions of Word, Excel and
Outlook.
The iPaq's US$499 price tag makes it a steeper buy than Palms, which
start as low as $149 for the m100, a fact that may help Palm
continue to dominate the consumer and education markets. But the
Pocket PC's improved design, along with synergies with Microsoft's PC
and server software, could make it a compelling choice for some
corporate buyers going forward, said Kevin Burden, a senior analyst
with IDC.
"If you look at the enterprise and how they are adopting these
devices ... the bigger the company, the more Pocket PCs we're
beginning to see, the smaller the company the more Palms we see,"
Burden said.
MortgageRamp, a commercial real estate financing company in
Horsham, Pennsylvania, wants to arm its site inspectors with
handheld computers so they can deliver inspection results directly
from the field using wireless connections. The company has begun to
deploy hundreds of the devices, which should allow it to approve
loans for customers more quickly.
"We started out looking at Palm pretty heavily, just because
personally we all use them," said Ken Beyer, chief technology officer
at MortgageRamp. "But there's a real strong argument there (to
change). We have a Microsoft platform here and they've made it real
easy to put it on a Pocket PC."
The company uses Microsoft's SQL Server database, and likes the
synergy with the Pocket PC version of SQL Server, which is currently
in beta. In addition, the larger memory support from Pocket PC -- 32M
bytes on a typical device, compared to 8M bytes in a Palm -- makes
storing a corporate database on the device a more realistic
proposition, Beyer said. (Compaq is an investor in MortgageRamp.)
Some analysts also cited the familiarity and breadth of Microsoft's
development tools as an advantage for Pocket PC. Far more
third-party developers offer applications for Palm devices, but
corporate buyers may be swayed by the Pocket PC's familiar, 32-bit
Windows operating environment, said Gerry Purdy, president of
research company Mobile Insights Inc.
Palm's proponents, on the other hand, point to its strong installed
base of users in the workplace -- a momentum that can be carried
into corporate deployments, argued Michael Mace, Palm's chief
competitive officer. In addition, handhelds based on the Palm OS from
Symbol Technology already have become a mainstay in key vertical
markets, where, for example, they are used by warehouse workers to
track product inventory.
Palm already offers server software to manage and keep track of
multiple devices deployed to workers. At its PalmSource developer
conference that begins this week in Santa Clara, California, hundreds
of Palm partners will announce products that make it even easier to
deploy and manage Palm-based handhelds in the enterprise, Mace
said. [See "Palm Targets the Enterprise," Dec. 8.]
Palm will also announce a deepening of its relationship with Sun
Microsystems Inc. over its Java programming language, Mace said,
although he declined to elaborate. Microsoft is in a legal battle with
Sun and has shied away from supporting Java, which is popular among
some corporate developers, and which Microsoft views as a threat to
Windows. IDC's Burden said Microsoft's sometimes antagonistic
relationship with Sun, Oracle Corp. and some computer makers won't
help the company push Pocket PC into the enterprise.
"You can't discount the resentment out there in the industry towards
Microsoft," Burden said.
What corporate customers really care about, according to Mace, is
development tools and the availability of skilled programmers. Palm
has a better story than Microsoft on both counts, he contends. In
addition, he notes, Palm partners offer applications that allow users
to view files created with Microsoft programs like Excel and Outlook --
they just aren't allowed to market them using those familiar brand
names. And early next year, he said, Palm will add support for SD
(Secure Digital) cards in its devices that increase available memory to
64M bytes.
"We're still seeing a very rapid uptake of Palm throughout enterprise
accounts," Mace contended, citing examples ranging from the U.S.
Navy to Nielson Media Ratings. "I'm sure you can find cases of people
looking at Pocket PC, but in terms of actual sales we're seeing
tremendous ongoing interest in Palm ... and I don't see any particular
trend by organization size."
Nor are Palm's fortunes tied to its own brand of devices, analysts
note. As well as Handspring and Symbol, the company licenses its
Palm software to Sony Corp., IBM Corp., Kyocera, Nokia Corp. and
TRG Products, each of which makes royalty payments to Palm for
devices sold.
"We hear a lot about the iPaq being in backlog, but the Jornada and
all the Casio products are not in backlog," Mace said. "That doesn't
show a lot of momentum for the Pocket PC. What it shows is that
there's one hot product out there."
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