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I for one think the MSFT threat is real, and it's clear from the press they're getting that they'll make some inroads in terms of market share. But I'd like to make a couple of points on this:
(1) I believe that the overall PDA market is going to grow so fast that Pocket PC's market share isn't going to dent Palm's own sales growth at all. In fact it may give it a boost by helping to push the overall market for handheld devices.
(2) While the more powerful processor, more memory and the ability to run MSFT apps may well appeal to some users, that's not what most users want from a handheld (IMO). Ultimately of course, the marketplace will tell, and I'm sure Palm will watch this carefully.
(3) I think it would be a major tactical mistake for Palm to try to match Pocket PC in these areas and take on MSFT on their own turf. That's where Corel, Lotus, Novell met their Waterloo, and it's just the battle MSFT wants to fight, witness the taunting remarks in the interview of MSFT's Waldman that were posted a while back here. Palm is wise not to take that route. That said, I don't believe that Palm is ignoring the threat.
(4) The one area that Palm will probably address is the color screen, though again it's clear that Palm has not exactly bet the company on the IIIc. I'm sure they'll fix this for those users who want color, but for most PDA functions, is it really necessary? The SI interface I'm typing this in is practically devoid of color, and would work equally well on a monochrome screen. This may change of course as lower power and cheaper color screens become available.
As for the 25% retail market share that was reported by PC Data for HAND that seems to worry you, I don't think you can place too much reliance in PC's retail sales data from one month (June) in projecting market direction. I've previously crunched the PC Data numbers for June and come up with 73% for Palm, 23% for Handspring, but that was just the retail side.
The CNET article from the other day gave 65% to Palm, 21.6% to Hand, and 13.4% to all others for the first 6 months of the year. But when I factored in Palm's 30% sales to enterprise customers (a non-existent market for Hand right now), Palm's overall share comes out at 72.7%, Hand's at 16.9%, and others at 10.4%. Granted the data aren't that good, but I'll be surprised if Hand's 25% retail share for June holds up longer term. Remember that was their IPO month, and Palm had trouble getting all the parts they needed. I'll bet you Palm has fixed that problem this Q, though maybe at the price of a slightly lower GM if they've paid a premium to get what they needed.
Yes, Hand has done well with it's product launch, and their models have impressive features. But I think Palm will do more than hold their own, particularly when the $50 wireless connection kits for the M100 and other models come out before year end, and the SD slot expansion models are introduced early next year. And I wouldn't be surprised to see new Palm models with the StrongArm processor and a new OS early next year concurrent with the SD expansion introduction.
Nobody is going to stand still in this market.
Just my 2c worth.
David T. |
