"Gadgets of the Moment" addendum to Barrons article.
FEBRUARY 28, 2000
Gadgets of the Moment
Cover Story: Palmed Off
The current generation of handheld computing devices debuted in 1993 when
the Apple Newton was introduced. The $799 Newton won instant ridicule for the
flaws in its handwriting recognition software and was pulled from the market in
1998. From this inauspicious start sprang the Palm Pilot in 1996. Created by
former members of the Newton development team, the Palm was an almost
instant hit, and, soon after, the battle for the shirt pocket began.
On one side stands the operating system devised
by Palm and used in the Palm Pilots; on the
other is Microsoft's Windows CE, a
stripped-down version of Windows used by
Hewlett-Packard, Casio and Philips. Whatever
the merits of the two -- and this is an area
where tempers still flare and arguments
rage-buyers have put their money on Palm,
giving that company a commanding 68% of the
U.S. handheld market and an estimated
50%-plus of worldwide PDA sales.
The Palm line of organizers began with the Palm
Pilot and went on to the Palm III, V and VII
models. All work essentially the same way and
look much the same. The devices fit in special
cradles that allow users to download and upload
information from and to the PCs. All that data,
including names, addresses, phone numbers,
calendar appointments, notes and to-do lists, can
be accessed on the Palm's touch-sensitive
screens using a stylus and a handwriting program called Graffiti. Software
written by some 29,000 independent third-party developers can be downloaded to
the Palms.
There are some key differences, however. The popular Palm III retails for
between $199 and $269 depending on memory and runs on batteries that must be
replaced every month or so. In terms of function, the sleeker and more
fashionable Palm V ($349) does the same things as the III, but it is significantly
lighter, has a better screen and is rechargeable. At the top of the line is the Palm
VII, which incorporates the above features and offers a wireless connection to
the Internet. It retails for $449.
With a monthly subscription to the Palm.net
portal, using the Palm VII you can
download e-mail, as well as tap into an
expanding list of special Websites, including
ABC News, MovieFone, E*Trade and
ESPN. The cost, however, can eat you up.
Basic service, at $9.99 a month, gives you
the right to download 50 kilobytes of
information, or perhaps 150 Palm screens
worth of information. Extended service,
$39.95 a month, gets you six times as much
data before extra charges kick in. But then
watch out. Barron's talked to one money
manager who was originally keen on buying
a Palm VII to access his e-mail on the
move. Then his firm calculated the cost.
Assuming an average of 40 characters for
each line of e-mail and 40 lines of text for
each message, the 275-odd e-mails he
receives daily would raise the cost of the ownership to a theoretical -- and
staggering -- $64,750 per month.
Palm competes with a number of Windows CE machines, including the $430
Casio Cassiopeia E-100 and the chunky one-inch-thick $429 HP Jornada 430se
(which, incidentally, is used by Denise Richards, the fetching female star of The
World Is Not Enough, the latest James Bond film, to defuse a ticking nuclear
warhead). Both these PDAs come with a long list of features including basic
contact and calendar PC synchronization, as well as such features as movie and
MP3 music playback capability. But they also come with one real disadvantage,
Windows CE.
The problem with CE is that Microsoft
has never really devoted the time and
effort necessary to make it an
especially good or stable operating
system. This may change as the market
grows and Bill Gates looks for new
worlds to conquer. But so far, it has
been something of a flop. NEC builds a
tablet-sized CE device but dropped
plans for a palm-size unit. Motorola
entertained the idea of developing
software for CE but shelved it owing to
lack of interest. The biggest defection,
however, came when Philips said it
was terminating the Nino, its line of
CE-based PDAs, apparently because of
both poor sales and lack of growth
potential.
"For now, Palm is the victor over Windows CE, that's easy to say," says Ken
Dulaney, the mobile-communications specialist at the Gartner Group. "But
nothing is permanent here."
But if CE has been something of a
paper tiger, Palm is not without
competition. Early last year, Jeff
Hawkins and Donna Dubinsky, the two
people who had founded Palm and
created all the organizers through the
VII, left to start their own new firm,
Handspring. In September, Handspring
launched its Palm-beater, the Visor, a
$250 PDA running the Palm operating
system that does all the Palm V can do
at a cheaper price. Most important, the
Visor is infinitely expandable. Small
card-like modules can be plugged into
a special slot in the device, allowing it
to run large proprietary programs and
even function as an MP3 music player
or, theoretically, just about any mobile
consumer device. The Visor can be
bought only from Handspring's Website (handspring.com), and supply is tight.
But two of the hottest PDAs around right now are not American-made. The
Revo, which was one of the smash hits of last fall's Comdex computer show in
Las Vegas, comes from Britain's Psion. This $400 device is small enough to fit in
a pocket and smart enough to do all the normal PDA functions, including e-mail
through an infrared connection. Like Palm, thousands of third-party developers
(mainly in Europe) have written programs that can be downloaded. Though it
lacks a backlit screen, which can make it hard to see in low light, the Revo
incorporates a small but fully functional keyboard, so users don't have to learn a
stylus handwriting program.
And the must-have product among
Wall Street's bankers and brokers is
the $359 Blackberry device from
Canada's Research In Motion. The
tiniest of existing handhelds at 3 1/2
-by-2 1/2 inches, the Blackberry
offers the same synchronization and
address storage capabilities as all
other PDAs, has a six-line screen
and a minuscule but usable
keyboard. Unique among existing
PDAs, after signing up for a
$14.95-a-month plan with the likes
of BellSouth or RCN, the Blackberry
offers unlimited receiving and
sending of realtime mobile e-mail --
and future models will access the
Web.
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