Barrons iPaq/RIMM/Pocket PC/Nokia Article:
Mang, this is also an excerpt of Barrons. It is the cover article of today's Barrons. No mention of the recent HWP decision to contemplate Linux/Palm O/S instead of Windows C/E. Interesting note of RIMM's competitive advantage over O/S devices.
The Evil Empire
"...Here again, Microsoft's .Net strategy, which aims to allow consumers to tap into information any time, any place and on any device, plays into the trend. Microsoft's Pocket PC operating system, which is based on the Windows platform, gives users a uniform interface between their PCs and their PDAs, including H-P's Journada and Compaq's iPaq. Not only will Outlook sync up perfectly between handhelds and PCs, but users will be able to pass digital music and images seamlessly back and forth between the two, as well as data for core applications, like word-processing, spreadsheets and e-mail. That's a lot more sophisticated than the calendar and address book functions that are Palm's strength.
"The iPaq is doing well beyond our expectations," says Cindy Box, director of marketing for Compaq's wireless Internet solutions group. To keep up with demand, Compaq has increased production by 50% every quarter and would increase it more if it wasn't constrained by a lack of components. Indeed, Compaq currently has 500,000 iPaqs on backorder. The attraction: "We're pushing beyond calendar and contacts," she says. "People want to do more."
And toward the end of this year, handheld makers like Compaq and H-P will begin incorporating wireless data communications into their handhelds, allowing mobile e-mail and Internet surfing. Built-in phones won't be far behind.
So far, however, Pocket PC-based handhelds make up less than 10% of handhelds sold through U.S. retailers, according to NPD Intellect, a Port Washington, New York-based research shop. And if Compaq's experience is any indication, such devices could become significant players over the next few years. "If you look at this particular space a year from now you'll see a really radical shift in what people have," predicts Mary Starman, product manager for mobile devices at Microsoft. "I think that we're going to see some significant gains in our market share in the next year."
But consumer software, services and devices, which includes handheld devices, will only represent about $2 billion, or 7.8%, of Microsoft's total revenues, this year. It will take a few years for the group to have a meaningful impact on Microsoft as a whole, even though the division's revenues are growing in the 20% to 30% range.
Then again, there are those who believe that the future may not include a device with an operating system, revolving instead around devices that use Java, like Research in Motion's BlackBerry. A favorite among mobile professionals, the BlackBerry is a pager-sized device with a monochrome screen that stays on all the time to receive e-mail. Pocket PC handhelds, by contrast, can't stay on all the time without their batteries running out of juice. With Pocket PC handhelds, users will have to dial in for e-mails, rather than having them automatically delivered.
Table: Growth Factors
Product What it is What to watch for When available
Pocket PC Software for handheld devices iPaq sales Now
Stinger Software for phones Nokia and Motorola defending their turf Before Christmas
While Microsoft stands a strong chance of grabbing a significant chunk of the growing market for handheld devices, it may have less luck with cellular phones. At last week's Internet World Wireless show, the company announced deals with Mitsubishi Electric and Samsung Electronics to provide its so-called Stinger software to run their wireless phones. In this area, Microsoft is taking on big entrenched competitors, like Nokia and Motorola, which are not eager to cede any ground to the software giant. Here again, Microsoft will try to appeal directly to the consumer. There are tons of devices available, but they are not integrated around a set of services, explained Rick Belluzzo, Microsoft's newly appointed president, at a recent conference. This situation creates "technology schizophrenia, where every consumer provider wants to own that consumer experience, and if consumers follow that path, of course, they'd have 12 e-mail names and they'd have different security and authentication [codes] and all of the experiences would be different. But the vision for all of this to work is to have this common set of services, [with] the users in control..." |
