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Technology Stocks : PALM - The rebirth of Palm Inc. -- Ignore unavailable to you. Want to Upgrade?

To: KevRupert who wrote (1206)	8/13/2000 2:06:09 PM
From: El Guapo	Respond to of 6784

advalorem: The only questions are: The answers, in my opinion -- without hesitation, are 1) MSFT can move faster than the growth of the industry, if they have the best product, I don't really see how moving faster than the growth of the industry is dependent upon having the best product. If I didn't clarify in my previous posts, what I mean by 'faster growth of the industry' is simply: The PDA industry grows at 100% annually (doubling each year), Microsoft's PDA revenues grow at 20% annually. At this growth rate, Microsoft's current 10% market share and 20% growth rate equates to 3.75% market share 2 years from now and 0.2% 3 years from now. Now, having the best product may help things, but in order for Microsoft to reach 50% market share in 3 years, they need to double the growth rate of the industry each year. They need a 200% growth rate, rather than 20%. In other words, Microsoft's PDA division needs to triple in revenues every year for the next 3 years just to catch up to 50% market share. And you're saying that they're going to be the market leaders in TWO years. That's a radical and bold statement. I'll agree that we disagree on this issue, but I'm glad you shared your paranoia on the board. It helped me think about the issues some more. advalorem: and 2) MSFT will commit, and has committed, ENORMOUS amounts of money to the PDA industry. They want to control the PDA industry, because with it comes the future wireless device O/S dominance -- if successful. This is how MSFT operates. You seem to portray MSFT as a slow moving utility company. They identify industries, and their goal is to dominate. As Geoffrey Moore (of Gorilla Game fame) stated, a company doesn't have to be the innovator to be innovative. It's not that MSFT is a slow moving utility company, it's that they have an amazing ability to grow a multi-billion dollar company by 20% every year. And they know how to do this better than any company in the world. However, today's markets are growing much faster than that. Microsoft has not proven its effectiveness in any of these new arenas which grow faster than 20% annually. I do not see Microsoft dominate the ISPs, as was once feared. I do not see Microsoft dominate portal sites as was feared during the browser wars. Well, they won the browser wars. But the landscape changed so quickly that browsers were made irrelevant anyway. I don't think Microsoft is capable of commiting as much money into the development of PDA technology, software, and marketing alone as much as PALM, HAND, Sony, and many other 3rd party developers are willing to commit to the PALM OS platform. Their battle isn't going to be won in the consumer retail space with a superior product. Their battle will be won if they can win more strategic partners, licensees, and developers than PALM. Both companies understand where the battleground is, so it will be a fierce battle. But in this war, having the best product is like having the best rifle. You still need sheer numbers in troops, fanatical morale and plenty of allies to win, not just superior technology. Microsoft lacks the embittered morale of PALM's ex-Apple guys, and is taking the battle on PALM's home turf. We'll see what happens, but I'd be surprised if Microsoft has more than 20% market share in the PDA market 2 years from now. El Guapo