Re: Is Palm the Next WordPerfect?
Lesson One:
Lesson One: Microsoft can wait longer than Palm. Palm is correct, of course, that the public has shown little desire for Pocket PC devices. They forget, though, how long it took Microsoft to establish Windows in the marketplace and how much ridicule the company took about Windows before that occurred.
Microsoft was forced into the strategy of waiting for the market to catch up to Pocket PC by botching the first couple of versions of Windows CE. Still, as was the case in the 80s, Microsoft has the resources and patience to wait --and to continue to improve the Windows CE platform in the meantime.
My amateur opinion: The majority of investors are ignoring the threat of Microsoft C/E O/S. Go to the Palm thread, and a debate of competition doesn't exist. I'm making the assumption that investors accept Palm's role as the industry leader -- and ignore any possibility of a WordPerfect scenario (I wonder if Microsoft management envisions a world being the #2 player to Palm?). Have these investors actually read the product differentiations?
Lesson Two:
Lesson Two: Technology prices always fall. Palm is correct that Pocket PCs are currently too expensive to succeed. Pocket PCs are so expensive largely because they require so much RAM and high-quality color displays.
Perhaps not coincidentally, the price of those same components for desktop PCs held back Windows in the 1980s. However, it doesn't take a Wharton MBA to know that, in the high-tech world, component prices always drop. Pocket PCs won't always be so expensive.
My amateur opinion: What I would have done to get into Wharton! Prices will come down. Microsoft's RAM & color technology are so superior to Palm right now, that it's not really worth debate. The Compaq iPaq H3650 has a 206 mhz. What is Palm's best: 16 mhz -- I believe. The thrust of this issue is that while Palm is working on applications to keep up with the Microsoft C/E O/S, the competition is moving beyond their current offerings too. Palm isn't the innovator in the PDA market at this time. Take a look at the October issue of Technology Investor.
Lesson Three:
Lesson Three: People want compelling applications. Palm is correct -- for now -- in saying that the majority of users just want their handhelds to manage their personal information and e-mail. However, time and again, when compelling applications are created, people migrate toward them.
Multimedia applications, an area in which the Pocket PC platform is clearly superior to Palm's, have the potential to be compelling. Those compelling applications aren't here yet, but ...
My amateur opinion: People laughed at me when they said I would never use Excel/Word/Microsoft Money on my HWP 545. Well I do. The only unique advantage that the Palm/Hand offers, based upon my usage, is the Tiger Woods game consule for the Handspring unit. Consumers will demand applications -- advanced applications that will require the best in color screen clarity, chip processor, and memory storage. To think otherwise has no merit in my view. Consumers will always want to do more. (I'm using a Gateway EV700 model, not an Apple II model.)
Lesson Four:
Lesson Four: Compelling applications are inevitable. The Net device world is full of innovative, bright people and there's lots of money available to fund development. I take it as an article of faith that compelling applications will be available sooner rather than later.
My amateur opinion: Microsoft owns the applications right now. Internet Explorer, Microsoft Money, Microsoft Excel, Microsoft Word. How is Palm going to integrate these type of applications into their units? Palm is late to the game as it is.
Lesson Five:
Lesson Five: People will use a clumsier operating system. Palm correctly points out that Pocket PC is clumsier to use than the Palm platform. Desktop Windows is clumsy, too, but zillions of users have become accustomed to it even though more usable operating systems are available.
Once users learn an operating system, they stick with it. And compelling applications will make people take the trouble to get used to Pocket PC.
My amateur opinion: Very true. I know people that want to use Corel products to this day, WordPerfect & Quattro Pro. This despite the fact that Corel has a stock price approaching zero.
How Long Does Palm Have?
Palm is readying a major new platform release for early in 2001 that builds in lots of wireless capability but won't significantly improve the platform's multimedia capabilities.
It's guesswork, of course, but I think Palm has a year after this next release to upgrade to a multimedia-savvy 32-bit operating system. If it doesn't, the handheld world could change profoundly. Like Windows, Pocket PC could become an overnight success that took years to occur. And Palm could go the way of WordPerfect.
My amateur opinion: Read what Palm stockholders believe (i.e., on the Palm thread). The founders of Palm have moved on to Handspring, and I believe they will create the most innovative, dynamic product possible -- outside of the C/E O/S environment. |
