February 12, 2004 1:51 PM PST
PalmSource woos developers to wireless
That's the message from PalmSource, the maker of the Palm operating system. While developers have traditionally written programs for handheld devices that sporadically "HotSync" with a PC, the devices of the future will have wireless connections that can directly access the Internet. As a result, developers need to write a different type of software than they have in the past.
"It's very important to get them to start thinking about a wireless world," said PalmSource CEO David Nagel, who said he has been trying to get developers to shift their thinking for the past three years.
For PalmSource, recently spun off from the old Palm, the move is critical. The company gets money for each device sold using its operating system. The handheld market, which has been struggling in recent years, is projected to grow only slightly. In comparison, the emerging smart phone market is poised to increase 70 percent to 80 percent per year for the next several years, according to analysts.
But in trying to tap a new market in smart phones, the company risks alienating its large developer base--historically, one of the advantages that Palm has had over rivals such as Microsoft. In addition, PalmSource is asking programmers to simultaneously develop for two versions of the Palm operating system.
It's unclear whether the legions of small companies and individual programmers that have supported the Palm OS in the past will have the resources, or desire, to write a different kind of software.
"Is the smart phone really going to boost things?" Palm developer John Chaffee asked. "Clearly, that's where everyone is focusing."
Chaffee, like many Palm programmers, has focused on software that is stored on Palm devices and that then synchronizes data when the handheld is connected to a PC. His company, SplashData, has focused on offering programs that work on both desktop computers and handhelds.
He is willing to explore ways of adding some wireless functions in some programs, such as the ability to get online financial information, but says it is too soon to focus on software that relies on a wireless connection.
"I'm wirelessly frustrated. When can you get a good connection and maintain it?" said Chaffee, who lives in a Seattle suburb that has only one mobile carrier with data service. "Anything we do is not going to be wirelessly dependent."
Nagel concedes that PalmSource is asking hundreds of thousands of developers to go in new directions that are potentially more difficult to navigate. "It's a more complex world. You have to worry about carriers," he said. "Most of them have never done these things."
But developers do like one aspect of wireless devices: They present a more direct way to sell programs. With wireless, people can purchase, download and use software immediately, instead of buying a CD or downloading software for transfer to a PC.
"It's going to have to be over-the-air, seamless," said Howard Tomlinson, CEO of Astraware, the game maker responsible for the popular game "Bejeweled" and other handheld titles. "That's the change smart phones will make."
At the same time, PalmSource is trying to enlist programmer support for its new dual operating system strategy. This week, PalmSource publicly unveiled the effort, which aims to maintain use of the current Palm OS 5 (now known as Garnet) while it introduces a more powerful, largely rewritten OS 6 (now known as Cobalt).
With Cobalt, PalmSource is trying to answer critics by making the OS more capable, adding features such as the ability to run multiple programs at the same time. However, PalmSource's main goal is to get the OS into the mainstream of the cell phone market--something Nagel said is best served by the current OS, with its small size and relatively modest hardware requirements.
Holding on to Garnet, Nagel says, will pave the way for OS-enabled cell phones that can be sold to carriers for $200 to $300. Such devices, he said, may be offered for free--or at least, for less than $100--to new subscribers through subsidies from carriers.
"That's a magical price point," Nagel said. "We think that's going to open up volumes."
Price though, is not the only issue preventing the Palm OS from being used in traditional cell phones. Unlike those devices, which use software controlled and sold by the carrier, Palm OS-based phones typically can run any program that the owner installs. That model means carriers miss out on a sales opportunity. In addition, it could lead to customer support problems: The software installed by owners is not necessarily tested and could cause some devices to crash. That, in turn, leads to calls to the carriers' help lines.
"Those are nightmare calls to operators," Nagel said.
Nagel said that PalmSource and those hardware makers that use its operating system may have to make some adjustments and create more carrier-friendly devices, if PalmSource is to attack the mainstream cell phone market. "We and the carriers will have to learn what works," he said.
PalmSource does have some momentum on its side. Early demand for the Treo 600, which uses Garnet, has been strong. More importantly for carriers, there is some evidence that it is also boosting the amount of money that people spend each month on services using traditional cell phones.
European cell phone carrier Orange has said that the Treo 600 generates the highest revenue per month of any device it sells.
Gartner analyst Todd Kort said that PalmSource is doing the right thing in taking a dual-OS approach. Cobalt's features will help Palm in the business world, where the OS has lost ground to Microsoft's rival Pocket PC, he said.
The new Palm OS, it is hoped, will lead to a renewed creativity among programmers. While this week's Palm developer conference drew nearly 1,000 people, many of the products on display were the same kinds of card games and electronic reference guides that have existed on the Palm for nearly a decade.
"It's not until you give them new tools (that) they can do really new things," Nagel said.
On the downside, Palm's dual-OS strategy also strains the resources of PalmSource and its developers. Nagel said the OS maker is doing what it can to minimize the risks and is trying to create tools that will make it easier to write programs.
PalmSource is scaling back development efforts in other areas. For example, it is no longer planning future versions of its desktop software for the Macintosh. Instead, Mac owners that want to sync up their Palm will have to use third-party software such as Apple's iSync or Mark/Space's Missing Sync.
The company is also trying to be selective about which manufacturers it targets to make its devices. The trick, says Nagel is to find the right partners that can take the OS in new directions, rather than companies that will clone existing products.
"I'm not interested in signing them up by the pound," Nagel said. "We're not a huge company."