Five reasons for Palm's slide

When Palm ruled the handheld-computing market, few thought it would ever have to partner with Microsoft.

But a series of missteps, from manufacturing gaffes to strategic blunders, eventually made Palm's partnering with its longtime rival seem like a possibility--and, for both parties, a palatable one at that. While no one mistake can be blamed for Palm's difficulties over the last five years, many analysts agree that a combination of events both strengthened Microsoft's hand in the mobile market and made Palm more open to partnering with its old adversary.

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"When viewed in conjunction with the sale of PalmSource (a Palm spin-off that now manages the Palm OS) earlier this month, it's an acceleration in the demise of the Palm OS platform and final confirmation that its once-dominant position in the broader handheld market is gone for good," said Carmi Levy, a senior research analyst at Info-Tech Research Group.

Palm's decision to use Windows Mobile software also highlights some of the missed opportunities and key moments in Palm's history that could have allowed the company to remain not only dominant but autonomous in the smart-phone marketplace instead of seeking the help of Microsoft.

So what happened?

Palm executives were slow to see the convergence of cellular phones and personal digital assistants.
Although it was arguably ahead of its time when it released the wireless Palm VII in May 1999, which included an embedded wireless radio, Palm was later outflanked by Hewlett-Packard's wireless iPaq and Research In Motion's BlackBerry devices as Palm failed to quickly recognize that consumers would want voice access and data access in the same gadget.

The company followed the Palm VII with a slightly more advanced product called the i705 in early 2002. Like the Palm VII, it used the same BellSouth Wireless Data network, formerly known as RAM MobileData. The service covered almost 300 metropolitan areas, but critics complained that the network was slow and that you never really knew whether the device was connected.

On the next go-round, later that year, Palm finally moved to using the higher-speed GSM (Global System for Mobile Communications) telephony network, but users of its GSM-enabled product, the Tungsten W, found the device cumbersome because they were required to use an ear bud to hear their phone conversations.

Partly because of its misstep, the company was forced to buy Handspring--founded by original Palm co-founders Jeff Hawkins and Donna Dubinsky--in June 2003 for $170 million. Analysts said the Handspring acquisition would have helped Palm because Handspring already had developed a substantial market for its Treo handhelds.

"Nobody buys traditional handhelds anymore," said Sam Bhavnani, an analyst at research firm Current Analysis. "The entire market underwent a paradigm shift. The mass adoption of cell phones eliminated the need for basic PIM (personal information management) functionality from a Palm Pilot."

"As popular as Palm has traditionally been with end users, it has always been a marginal corporate player."

--Carmi Levy, senior research analyst, Info-Tech Research Group

So far, the Treo has been a boon for Palm. In the last quarter alone, it shipped 470,000 Treo units. The full-function phone and handheld organizer offers integrated Bluetooth technology, a higher-resolution screen, multimedia capabilities, a removable battery, nonvolatile memory, an improved backlit keyboard and support for direct corporate e-mail access to Microsoft Exchange Server 2003.

Palm has had a hard time making its corporate customers happy.
Analysts say Palm just couldn't nail down the formula for over-the-air synchronization with Microsoft Outlook, which business users demand and RIM nailed with its BlackBerry device.

Synchronization between the Microsoft and Palm became a critical issue, particularly since Windows is already in 95 percent of corporate environments.

But problems arose. Some users complained that InstallShield, the installation software used in the devices, was incompatible with

[Llib Setag]

Top Five REAL Reasons

1. Microsoft's illegal monopoly on PCs.<br />2. Citizen Gates' lust for money &#38; power.<br />3. Microsoft's illegal monopoly on PCs.<br />4. Big Brother Ballimer's lust for money &#38; power.<br />5. Microsoft's illegal monopoly on PCs.

[mousky]

Cell phones or wifi?

"Palm executives were slow to see the convergence of cellular phones and personal digital assistants."<br /><br />The majority of this section talks about the lack of wireless not cellular capability in Palm products. A cellular phone is not the same as a wifi-enabled device. But then the author says that the Treo has been a boon for Palm. So it seems to me that Palm did get the convergence of cell phones and PDAs right.

[heystoopid]

Like all companies

The senior management, lost sight and vision, were driven by total market greed, which leads to maximise profits and returns at everyone's expense including the customers!

[Andrew Pingrey]

You can only be a hardware and software company if you continue to innovate

Palm (with its control over PalmSource) has had a good run but its R&#38;D has stagnated over the past five years because of resource splitting between hardware and software. As a result, Palm's hardware is inferior to generally available PocketPC reference designs and software development is farmed out to little-known companies and hobbyists. This has forced Palm to lengthen product cycles and left them with poor web connectivity (Blazer is primitive, java is DOA, browser and app plug-ins are non-existent), Microsoft Office translators - not apps, and lots of abandonware from the 90?s. Although other companies have attempted to control the entire user experience by crafting the hardware and software (Apple), only those who can stay cutting-edge can prosper. For a maturing Palm and PDA market, it was bound to happen.

[ackmondual]

Office suit on Palm is generally better than M$

Documents To Go and QuickOffice are 2 Office suites for Palm that work well for most users. Native formats, attachments, and several advanced features still there. Formatting, images, and tables were retained.<br /><br />Pocket Word and Pocket Excel were garbage in where those formatting attributes weren't retained. To be fair, there are PPC equivalents of Office suite. Palm came out somewhat ahead b/c DTG was bundled with most Palm handhelds. For PPC, u needed to spend extra $$ on this 3rd party app.<br /><br />Word Mobil, Excel Mobile, and Powerpoint Mobil (read only), claim to retain formatting and have other neat features. I'm curious to see how well it fares when they'r released with Win Mobile5

[thedreaming]

why palm why?

I used to have a palm III and I used it to death, then I got a palm m105 and I still use it. Now, I've read that palm is starting to use windows ce instead of palm os?<br /><br />So, gates won that war. One day, it will all be microsoft. Wonder when they'll come out with their line of clothing...

[ackmondual]

so far, it's just for the tr700w

As of now, all other Palm handhelds still run pOS. Reports speculate it's unlikely Palm will start putting WM on all their handhelds in lieu or in addition to PalmOS. Time will tell. I'm gonna guess that palm will be mostly PalmOS for a while at least.

palm demise

One of the biggest problems not mentioned was the terrible Palm software for lap top computers which was unreadable without cumbersome procedures which were incompatible with other uses.

[grant_stevens]

PalmOS

As the article mentions, it's not so much Palm's slide, as much as it is PalmOS's slide. Just as Mac OS was archaic until OS X, Palm OS (as it is currently sold on handhelds) is still living in the world 16 MHz CPUs and cooperative multitasking. Anyone who has tried to use a modern, network-intensive app on modern Palm can tell you why PalmOS is on its way out. Poor system stability and a weak, inflexible network stack, keep Palm Pilots doing exactly what they were doing 10 years ago and little more.

[ackmondual]

uhmm, try 200MHz+

16MHz was around 4 years ago. 2 years ago till now, many pOS handhelds are using 114MHz+. Palm's newest crop of handhelds from recently are all 200MHz+.<br /><br />I say this b/c there's a HUGE diff betw 16MHz and 114MHz.<br /><br />And PPCs had their fair share of crashes and instabilities. At least that's what several dual users have claimed.