August 11, 2005 12:42 PM PDT

Making the case for Windows on Palm devices

A senior Palm executive says his company could benefit from building a mobile computing device that runs on the Windows operating system made by once-bitter rival Microsoft.

In an interview, Palm Chief Financial Officer Andrew Brown said that building a Treo that runs on the mobile version of Windows might help the company woo corporate customers who have been reticent to buy its Palm OS-based gadgets.

"CIOs don't get fired for using Microsoft products," Brown said, though he did not say whether Palm has such a product in the works.

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What's new:
Palm's money man says there are benefits to offering a Windows Mobile-based Treo, but is stopping short of confirming the maker will do so.

Bottom line:
Palm has long said it would consider using a non-Palm operating system, but the time may be right for it to do so as Microsoft steps up its mobile e-mail push.

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With Sony's decision to exit the handheld market and the closure of Tapwave, maker of the Zodiac handheld gaming device, Palm has emerged as the only major backer of the Palm OS, which is sold by PalmSource, a separately traded Palm spinoff.

Despite that shared heritage with PalmSource, Brown described Palm as neutral to the operating system its devices use--and the types of e-mail servers to which they connect.

"The fact is we are Switzerland, whether it be over the e-mail server or the OS," Brown told CNET News.com last week after a presentation to financial analysts at an RBC Capital Markets conference in San Francisco.

Nonetheless, Palm isn't likely to abandon the Palm OS. Brown noted that the company just extended its deal with PalmSource, paving the way for future generations of Palm OS products as well.

Brown's comments come just as enthusiast sites are buzzing with photos and videos purporting to be a next-generation Treo running Windows Mobile on a Verizon-branded device. The company has been studying other operating systems, including Windows Mobile, for some time.

Charles Golvin, an analyst with Forrester Research, said that if the photos of a Windows Treo product making the rounds are authentic, the product should be reasonably close to shipping to carriers and could be in consumers' hands by the end of this year.

Despite Brown's comments, a Palm representative declined to say whether the company has such a device in the works, but reiterated Palm's past statement that the ability to offer a choice of operating systems was one of the benefits of spinning off PalmSource. "We only would consider offering another OS as an additional choice if customers want it and if it represented incremental business," the Palm representative added.

A Microsoft representative declined to comment.

Palm, which once had the vast majority of the handheld market, has seen its share drop in recent years. Last November, Microsoft for the first time surpassed Palm in the number of handhelds shipped using its operating system, according to Gartner.

In a report earlier this month, Gartner showed the Palm OS running on just 19 percent of handhelds, compared with 46 percent of devices running Windows Mobile and 23 percent running Research In Motion's software. Gartner's figures include handhelds and wireless devices like the traditional BlackBerry, but exclude smart phones, including the Treo.

Palm has already taken some steps to move itself closer to Windows. Last October, the company inked a deal with Microsoft to allow Palm OS-based Treos to connect directly to Microsoft Exchange 2003 e-mail servers. That feature is standard on the current Treo 650.

IDC analyst Kevin Burden said a move to offer a Windows Mobile-based Treo is somewhat expected, given that even PalmSource appears to be headed in new directions. PalmSource has recently been talking up a move to port the Palm OS to run on top of Linux, announcing a deal this week with MontaVista Software.

"They are becoming less beholden to the PalmOS themselves," Burden said. "If PalmSource itself doesn't have this unbreakable loyalty, why should Palm?"

Burden said that the technical aspects of adding Windows Mobile to the Treo are relatively straightforward. The bigger challenge, he said, is coming up with the resources to develop and support products for multiple operating systems.

Still, despite the costs, Burden said that Palm executives may feel they need to offer a Windows option, in case Microsoft strikes a nerve with its latest moves to improve wireless e-mail on mobile devices.

"I just don't think Palm wants to be left out of that," Burden said.

For Microsoft, such a deal would allow it to work its way onto the screens of one of its longest-standing competitors. It would also allow Redmond to showcase its latest operating system, Windows Mobile 5, on the Treo, which is one of the most popular smart-phone designs.

Although much of the operating system diversification speculation has centered on Windows Mobile, Brown also held out the possibility that Palm could work with other one-time rivals such as RIM or Symbian.

Whatever the operating systems at its core, any new generation of Treo is likely to add support for one of the upcoming "3G," or third-generation, cellular networks, such as Evolution Data Only or the Universal Mobile Telephone System.

"Over the next 12 months, the majority of devices in the higher-end price range are going to be 3G devices," Brown said. "I think that's what carriers want."

CNET News.com's Michael Singer and Stephen Shankland contributed to this report.

10 comments

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Cluestick for Palm
There are already many Windows-based handheld units. Why on Earth would anyone consider a Palm unit running Windows? If Palm is entering that commodity market, they will need to be the "cheap, crappy, but minimally usable" alternative; every other niche in that market is taken.

Palm entering the Linux handheld market (the direction indicated by PalmSource) would be interesting, because it would be a major player with a kick-ass user interface and an effectively unlimited OS infrastructure.

Based on the recent mind-numbing decisions on Palm's part, I expect they'll go Windows and fade into obscurity within two years. Time for Palm users to order an iPaq. At least that way you have a choice of OS (Windows or Linux).
Posted by macemoneta (18 comments )
Reply Link Flag
If Palm goes for Windows CE....
... that's the end of PDA's for me. Or it will be when my Palm and
Clie PDA's die.
Posted by Earl Benser (4310 comments )
Reply Link Flag
As Bill Gates would always say...
Hardware and software are best as two separate businesses. I think Palm's move still respects the fact that Palm has good hardware technologies. Considering the outright high-end hardware requirement of Windows CE, Palm is brave to face the challenge. I think this confidence is quite assuring.
Posted by Mendz (519 comments )
Reply Link Flag
"CIOs don't get fired for using Microsoft"
No, they just get outsourced. I wouldn't hire a CIO today who didn't have a strategy for moving AWAY from Microsh*t where feasible.

Windows Mobile 2003. Give me a break. IE is stuck at v4.01 with no JAVA support. I can't even access Yahoo mail on it without fiddling around.
Posted by Stating (869 comments )
Reply Link Flag
Can I come to your 'going out of buisness' sale?
Thats funny. I wouldn't hire (or have respect for) a CIO today who didn't look at every possible choice, and weight each in turn. Sometimes its Apple, sometimes its Linux, and sometimes its MS. Anyone with a holier then thou bias about technology is doing their company a great disservice.
Posted by catchall (245 comments )
Link Flag
CIO's may not get fired, but . . .
Maybe they don't get fired, but one this is certain: "Partners" of
Microsoft (the FOB's) to a firm get squeezed out of making any
money. Interesting strategy comming from a CFO, I guess
Brown wants to run a non-profit.
Posted by philpacker (50 comments )
Reply Link Flag
Palm becomes platform psychotic, not platform agnostic!
People buy Palm for 2 reasons I can think of:

1. Practicality: ie, ease of use.
2. Politically: ie, it's not Microsoft.

A Windows-based Palm device has neither of these features. But it does have several extra disadvantages:

1. Why would anyone buy a Windows-based Palm device when they could buy a me-too Windows device from bigger, more stable, more 'corporate' companies like Acer or HP or Dell?

2. Furthermore, why would anyone who had bought a Palm for political reasons continue to do so under the company's new lack of faith? Why not buy a Symbian OS device which not only *isn't* Microsoft, but also has by far the majority market share for smart phones?
Posted by (1 comment )
Reply Link Flag
Palm devices
I think you completely missed the point of that article. No one said that Palm is moving to Windows Mobile or whatever for good. I see it as sort of an iPodesque move for Palm. They have seen market share drop (although the numbers seem fishy, they need to count smartphones) and need to regain it back again. Offering a Treo with Mobile and a Treo with PalmOS would be the best solution. That way a whole new market would be open to Palm, Inc., one that in the past was a rival. This is a very sound business move on Palm's part. Remember, market share is not the goal, profitability is the goal. We sometimes think that they are linked to each other, but they are not neccesarily. Apple Computer is not the greatest in terms of marketshare, but as far as profitability they are great. And apple users groaned when the iPod was released for Win and Mac. But lo and behold, Mac sales are slowly increasing after the iPod has really struck it big. Coincidence? I think not. Palm can lure its customers with solid devices that use power effectively, and those users may be open to using PalmOS based devices in the future. I think the long-awaited Cobalt OS is going to never be released, but I am confident an OS 7 will be released on top of linux, and that will make it utterly powerful. If only they would open-source the entire thing...
Posted by CNerd2025 (98 comments )
Reply Link Flag
Thank God for Windows
Palm OS is not as user friendly as Windows OS. I am glad that Palm wants to wake up from its slumber and make a product that works for a change.
Posted by vijaymaurya (2 comments )
Reply Link Flag
Haha no...
Windows Mobile is definitely not user friendly. I used a few devices
at the store and what some of my friends had and it's still a mobile
OS wannabe. PalmOS is simple and is better at getting the
information you need quickly.

Of course Microsoft has you so brainwashed in thinking that the
Start menu accepts no alternative.

Long live Macs and PalmOS. :)
Posted by dona83 (17 comments )
Link Flag
 

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