Why the Consumer Market Doesn't Matter

[Jason Dunn]

<a href="http://www.writingonyourpalm.net/column020225.htm">http://www.writingonyourpalm.net/column020225.htm</a><br /><br />I've long admired Jeff Kirvin's writing, and his Feb 25th column is a must-read. I'm sure many of you will disagree with the premise, and at one point I did too, but I reluctantly came to understand the truth last year. More on that in another upcoming post - read Jeff's article and tell me what YOU think.<br /><br />"In a ZDnet AnchorDesk article recently, the author explained how he thought Microsoft could beat Palm with the Pocket PC. Most of his strategy seemed to hinge on making the Pocket PC more accessible to consumers: making it cheaper, more customizable, etc. Basically, he seemed to think that the Pocket PC as it stands now is just too stodgy and expensive to catch on. He just doesn't get it.<br /><br />Whenever I see people -- well, not bashing, really, but disapproving of -- the Pocket PC, the "it's too expensive/big/stodgy for the consumer market" complaint is always high on the list. I don't think these people get that Microsoft isn't worried about the consumer market just yet, and the only reason you can buy Pocket PCs retail at all right now is to generate "mind share" and general awareness of the platform. It's a lot more profitable to sell 5,000 Pocket PCs on one order than to try to sell to -- and later support -- 5,000 individual consumers. While I think Microsoft will go after this market eventually, it's too soon now.<br /><br />The important thing is to get palmtops taken seriously as business tools. A leopard skin faceplate is not going to do that. What will do that is a device powerful enough to handle the bulk of what a lot of corporations buy notebooks for now, at a fraction of the price, weight and bulk. Pocket PCs can do that. Palms can too, but as I've mentioned before, the total cost of ownership (TCO) for Palms in the enterprise can be higher because of all the extra software that must be added to them, and the support costs of getting all that software to work together."

[Steve Bush]

Personal Computers were first introduced into corporations by employees and business unit managers, not IT. That's one of the reasons why companies sell to consumers, they influence corporations when it comes to new technology. Take the "airline magazine syndrome" for example.

Eventually (long after the cat was out of the bag) IT got control of PCs in the enterprise and created desktop services units. That's when IBM was able to leverage its relationships with IT managers to sell PCs into companies. I don't recall Microsoft ever having anything to do with getting PCs into corporations. And therefore I don't think Microsoft is the one to do it with Pocket PCs.

I believe it will happen the same way it did with PCs. Consumers, in the form of business unit managers, will lead the way. Manufacturers like Compaq, NEC, Toshiba and H-P will be the ones to sell corporations on Pocket PCs, not Microsoft. Microsoft will come in afterward to sell software.

[Ed Hansberry]

Personal Computers were first introduced into corporations by employees and business unit managers, not IT. That's one of the reasons why companies sell to consumers, they influence corporations when it comes to new technology. Take the "airline magazine syndrome" for example.

Exactly!!!! read on though.....
Eventually (long after the cat was out of the bag) IT got control of PCs in the enterprise and created desktop services units. That's when IBM was able to leverage its relationships with IT managers to sell PCs into companies. I don't recall Microsoft ever having anything to do with getting PCs into corporations. And therefore I don't think Microsoft is the one to do it with Pocket PCs.

But who brought in those PC's? Power users Those that knew the power of apps like Lotus 1-2-3 and the (then) convenience of DOS. Personally, I don't think PIM is going to cut it. I get the "wow's" with IT folks when I show them I can VPN to a terminal server over a cell phone connection and access corporate information from an airport. That gets the wheels turning in their minds. And that is what MS is counting on. And it is coming from those same power users whos ancestors brought PC's into the workplace. ;-)

I believe it will happen the same way it did with PCs. Consumers, in the form of business unit managers, will lead the way. Manufacturers like Compaq, NEC, Toshiba and H-P will be the ones to sell corporations on Pocket PCs, not Microsoft. Microsoft will come in afterward to sell software.

Yes - that has always been their business model. Sell a few cheap copies of Windows (or Pocket PC licenses) and sell big bucks in Office and Backoffice. Mobile Information Server, Windows Server and services are the revenue stream MS is looking for with their mobie device strategy. Compaq and HP are also looking to sell services and big iron to handle that MS software.

[Steve Bush]

You and I are 100% in sync on this, Ed.

Contrary to popular belief, IT managers are not running around looking for great ways to increase the efficiency of business units. It takes "power users" or technology advocates within business units to "force" technology into a corporation. IT folks are just trying to meet demand.

As far as Microsoft, it makes money selling seats on Office, hardware is just a means to an end.

[mrecuay]

IT folks are just trying to meet demand.


Often times I see that IT is actually trying to quell demand... there are usually better, smarter, faster ways of doing things, but they really just dont want to deal with it, or worse, fear they are incapable to deal with the changes.

[Take1]

If MS ever thought they would 'capture' the market from Palm selling $499 + PDAs they were insane. I always thought they were going going for the coroprate/power users. Let grandma and the technophobes use the Palm -- it's the AOL of the PDA set -- Really simple and not very powerful.

To compete with Palm on all market levels, MS would have to create a dumbed down OS to minimize hardware requirements. I wouldn't be interested in such a thing, and I'm not sure grandma would want one either. I'd let Palm have the cheapo end of the market and try to capture the mid and high end markets (that's where the $$ is anyway).

[pda2012]

But who brought in those PC's? Power users Those that knew the power of apps like Lotus 1-2-3 and the (then) convenience of DOS. Personally, I don't think PIM is going to cut it. I get the "wow's" with IT folks when I show them I can VPN to a terminal server over a cell phone connection and access corporate information from an airport. That gets the wheels turning in their minds. And that is what MS is counting on. And it is coming from those same power users whos ancestors brought PC's into the workplace. ;-)


I would agree to a certain extent that power users can introduce devices, etc. into IT infrastructures; however, this assumes that PPC can compete in that arena. What I mean by that is: give the average enterprise user a PPC to use for a couple of months, and the majority are going to toss it in the corner. We tried it and the majority of responses were that battery always seemed low or dead and that opening programs would get sluggish. Also, nobody liked the size and weight of the iPaq (sleeveless in most cases). Those that utilized VPN preferred doing so with a laptop for it's obviously bigger screen and quicker connection. I'm sure that had we chosen to stick with PPC, there would have been some very digruntled employees. We ultimately settled on Blackberries and Palms. Everyone seems happy.

[fmcpherson]

If you are suggesting that history will repeat itself, and that handhelds will gain corporate acceptance the same way PCs did, then I think Palm has the upper hand.

The reason why is the "killer app" theory. The reason why many of those people brought all those Apples into the office was to use Visicalc. So, it seems the question would be, what is the "thing" about PDAs that causes people buy them and to bring them into the office? Despite how much we deny it, the answer is PIM.

Most people that I talk do who have decided to get a PDA have finally agreed to the value of a using a handheld to manage calendar, contacts and tasks. But, since companies aren't buying these devices for them, their purchase decision of which handheld to get for PIM is the lowest price, which leads them to Palm and/or Handspring.

So, what happens when IT opens their eyes to realize that everyone has a handheld, and that handheld is a Palm OS device? Do they go with the defacto standard, or do they decide to go with a Pocket PC? Just how successful do you think IT organizations are going to be at telling their employees that they have to stop using their Palm in favor of a Pocket PC that is the "corporate standard?" IMHO, this is a big up-hill battle that suggests that Microsoft's corporate approach may not work.

[Jason Dunn]

The reason why is the "killer app" theory. The reason why many of those people brought all those Apples into the office was to use Visicalc. So, it seems the question would be, what is the "thing" about PDAs that causes people buy them and to bring them into the office? Despite how much we deny it, the answer is PIM.


I disagree - I think it's communication, and that's why PDAs haven't become mainstream yet. Until wireless is everywhere, and people can use PDAs to communicate, they won't be mainstream like cellphones are. Communication has always been, and always will be, the "killer app" for widespead adoption. IMO. :-)

[pda2012]

I disagree - I think it's communication, and that's why PDAs haven't become mainstream yet. Until wireless is everywhere, and people can use PDAs to communicate, they won't be mainstream like cellphones are. Communication has always been, and always will be, the "killer app" for widespead adoption. IMO. :-)


I agree. What that means however is that Microsoft is way behind in the race. What it also means is that, by your statement, the future doesn't look too terribly bright for Pocket PC and the jury's still out on Smartphone.

[Jeff Kirvin]

I disagree - I think it's communication, and that's why PDAs haven't become mainstream yet. Until wireless is everywhere, and people can use PDAs to communicate, they won't be mainstream like cellphones are. Communication has always been, and always will be, the "killer app" for widespead adoption. IMO. :-)


I agree. What that means however is that Microsoft is way behind in the race. What it also means is that, by your statement, the future doesn't look too terribly bright for Pocket PC and the jury's still out on Smartphone.


Way behind who? Pocket PCs are already much better communications devices than Palms. Do Palms come stock with VPN? Terminal Services? Instant Messaging? Heck, an Outlook-compatible email client that can handle subfolders?

Palm OS 5 will address many of these issues, but almost a full year after they became available on the Pocket PC. Symbian may have a leg up on Microsoft when it comes to mobile comms, but Palm is trailing by quite a bit.

[Jason Dunn]

I agree. What that means however is that Microsoft is way behind in the race. What it also means is that, by your statement, the future doesn't look too terribly bright for Pocket PC and the jury's still out on Smartphone.


No, what that means is that as wireless PDAs are finally available from various OEMs, Pocket PC, Palm, Handspring, etc. - they finally have a shot at becoming mainstream devices. The PDA is still a "new" concept on the market - it has to evolve quite a bit before they'll become common.

The long-term future for ANY disconnected, non-wireless PDA, is grim indeed. Five years from now they won't exist.

[pda2012]

Way behind who? Pocket PCs are already much better communications devices than Palms. Do Palms come stock with VPN? Terminal Services? Instant Messaging? Heck, an Outlook-compatible email client that can handle subfolders?

Palm OS 5 will address many of these issues, but almost a full year after they became available on the Pocket PC. Symbian may have a leg up on Microsoft when it comes to mobile comms, but Palm is trailing by quite a bit.


I think you're missing the point. PPC doesn't have a partner with a compelling enough wireless device causing anyone to really take advantages of the features you mentioned (if you yourself are, you are one of the few). I'm also not sure that even PPC 2002 is up to the task. Inbox is still a clunky program, I can't imagine what kind of battery life an "always on" PPC would get, and let's not talk form factor.

PPC currently doesn't have anything like the Palm 705. While it may not have VPN, Terminal Services, etc., the majority of the market doesn't care. They want email, and they want it in a one-piece, easy to use solution (the Blackberry is another perfect example). Initial sales for the 705 have proven brisk and the Treo is getting excellent reviews (many are saying it's the first smartphone to get it right). Even the Kyocera and Sprint models have sold OK compared to any communicator device using PPC.

The features you mentioned aren't really noteworthy until faster networks are in place. Sounds to me like Palm waited until the right time to bring out OS 5 (at least, if it makes it by the planned date).

[pda2012]

No, what that means is that as wireless PDAs are finally available from various OEMs, Pocket PC, Palm, Handspring, etc. - they finally have a shot at becoming mainstream devices. The PDA is still a "new" concept on the market - it has to evolve quite a bit before they'll become common.

The long-term future for ANY disconnected, non-wireless PDA, is grim indeed. Five years from now they won't exist.


Yes, but PPC is not an OS poised to take advantage of that. Smartphone might be, but Microsoft's track record with mobile devices has not exactly been impressive.

[Kemas]

I work in an IT department for a large multi-billion dollar company, don't run it just work in it. Anyway, my simple point is this. Two things should be considered before bashing IT departments. One, budgets for IT departments are not very high and getting smaller with each passing day. Two, IT departments are charged with maintaining the IT equipment of the company and usually setting the standards to make that job obtainable. This means an IT department can't turn on a dime nor would or should a company expect an IT department to do so. In the end the IT department is responsible for making the company's IT infrastructure tick. This means they don't want to chase down technologies unless they have a good business need. If they decide to early adopt that technology, say like American Airlines did with wireless PDAs in the hands of their ground teams, the cost of implementing needs to show some kind of solid ROI or the features it gives them shows a return in one or all of the following: faster, better, safier more secure. Pocket PCs for most corps, add no value to the company. They may add convienence, but that isn't always what is best for the company. Also, giving people the ability to check e-mail or carry e-mail wherever they go adds a huge issue. Has anyone heard the stories of major executives of major companies leaving their PDAs or phones in taxis, airports and what not. Think of competing companies that might be following them just waiting for them to do that. I believe it was a Cisco exec that had his notebook stolen with all kinds of extreamly important docs on it. Imagine what all of these PDAs in the hands of sales teams and vice presidents could do if they got in the wrong hands. Security on these things really doesn't exist yet. Wireless, that just puts more of that information in the hands of users and possibly the ability for a hacker to get into a companies network and do serious damage or steal important information. Keeping a hacker out is the important thing, once in, they can do untold damage.
IT departments have to think about this, where most users just think how great that RIM device or Pocket PC will be and how useful it will be. They aren't charged with protecting the company from those that would take advantage of these new technologies and the many holes that still exist.
Some IT groups are lax, others are strict and not always in a uniform fashion; politics come into play too.

[johnm]

One of the points these two front page articles regarding MS and the consumer marked was bringing up was whether MS should be trying to target the consumer market or not. I think this part of the discussion is pretty pointless. If the only barrier to low end consumers today is price, then time and moores law will fix this problem soon. Microsoft is doing with this platform, what they did with Windows. They shot for a vision that exceeded the current hardware / cost capabilities. Over time they new that the costs of hardware would go down and the performance would go up. In the beginning only corporations and early adopter would be able to afford it, but now how many of you are running Windows? The very thought of dumming down the platform to make it cheaper for consumers is ridiculous. MS has a lot of money and can wait for the market to catch up to it’s vision. It has built a platform that is rich enough and powerful enough to drive whatever killer app comes out tomorrow. By the time the rest of the market catches up, MS will have many years of experience and maturity under it’s belt, and Palm will just be starting out with a 1.0 (call it what it is) version of a real OS.

If you want to try and use history to predict the direction this will go try this: If all consumers want today is a PIM (or just email for that matter), then defiantly they should go out and buy a palm. For a little bit more money though they can get a lot more ‘potential capability’ instead of a fixed purpose device. There was a time when people only WANTED to type a letter, and then they only WANTED to send email, and then only WANTED to browse the web. Now ask yourself how many people do you know who own a hardware word processor? Or how about an email appliance? Or even a Web TV or Web appliance?

[Scott R]

Ah, so much to say. Where to begin?

First, the argument that MS "has never tried to target the consumer market" is pure spin (to put it nicely). MS, most definitely, targetted the consumer market. The consumer market IS where the money is. Sell 5000 to consumers or 5000 to a company in one shot? You're right, that's a no brainer. But it doesn't work like that. Try, sell 1 million to consumers or sell to 100 companies at 500 per shot (50,000 total). Is there more profit to be made, per order, with corporations? You bet. Is there more money to be made in total if you can capture the mainstream market? You better believe it. Think about the fortune 500 companies and think about who their target customers are. Back to the original point...MS' Pocket PC rollout was a failure in the consumer market simply because it cost too much. But you better believe they targetted consumers. They gave away the development tools for free. Over the last year they've included Pocket PC fan web site webmasters in their MVP program. Some of the apps/features that set the PPC apart from the Palm include an MP3 player and a skinnable Today page, among other things.

So now for a dose of reality...Nobody is selling a $200 PPC because they can't.

Parts required + MS licensing fee > $200. Simple mathematics.

Scott

[johnm]

So now for a dose of reality...Nobody is selling a $200 PPC because they can't.

Parts required + MS licensing fee > $200. Simple mathematics.

Scott


Ah, and when Palm adds all the features they need to catch up, they won't be selling it for $200 either! Today. But if history has taught us anything, it is that the cost WILL come down.

BTW if there is any question about where all of this is going in the future take a look at this:
http://www.mvis.com/prod_microdisplay.htm

If you add a retinal display to a smartphone running PocketPC OS and it give you 800x600 resolution, I don't see much reason for a laptop etc. My bet is that the WinCe platform is poised to make this a reality.

[Rob Alexander]

But if history has taught us anything, it is that the cost WILL come down.


I'm not sure that history has really shown us that. It seems to me that history is more about getting more for the price that it's always been. You can't go out and buy a 6GB hard disk for $10 because prices have fallen, but you can buy a 20GB hard disk for what you used to pay for a 6GB one. You're still putting out the same money, but you get more for it. And why should it be different? It would cost nearly as much to make a 6GB hard drive as to make a 20GB one, so it makes sense to only sell the larger sizes and to drop the smaller ones completely.

I suspect the same will happen with the PPC market. Heck, it already has. I paid roughly the same price for my 64MB iPaq as I did for my 16MB Jornada palm-sized PC, which was only a little more than what I paid for my 8MB Casio E-10, which itself was only a little less that what I paid for my original Velo HPC. My guess is that I'll pay about the same price for my next PPC too, but I'll get 128MB of RAM, a 400mHz XScale CPU and built-in wireless communications of some sort.

There's just a certain cost that you're not going to fall below for putting together a case, a power supply, a screen, some RAM, a docking cradle, etc. It's just what Scott was saying. You just can't get there, and you never will because the features will go up instead of the price going down.

[Jason Dunn]

Yes, but PPC is not an OS poised to take advantage of that. Smartphone might be, but Microsoft's track record with mobile devices has not exactly been impressive.


What makes you say that? What about the Pocket PC makes it ill-suited for a mobile communications device?

[Jason Dunn]

I'm not sure that history has really shown us that. It seems to me that history is more about getting more for the price that it's always been. You can't go out and buy a 6GB hard disk for $10 because prices have fallen, but you can buy a 20GB hard disk for what you used to pay for a 6GB one. You're still putting out the same money, but you get more for it. And why should it be different? It would cost nearly as much to make a 6GB hard drive as to make a 20GB one, so it makes sense to only sell the larger sizes and to drop the smaller ones completely.


I disagree. When I bought my first Pentium computer in 1995, I paid $6000 CND for it. Today for $600 CND I can get something MORE powerful, and 1/10th the cost.

Yes, there is a minimum threshold that Pocket PCs will never fall below (ie: you'll never see one for $100, no matter what the features), but the $500 to $700 price range we're seeing now will come down. My guess would be we'll see a price reduction in the area of 30% in the next 24 months. Economies of scale and board-leve integration instead of off the shelf parts are HUGE factors here IMO.

[Jason Dunn]

Parts required + MS licensing fee > $200. Simple mathematics.


I'll be interested to see what the price of the new Xscale-based Palm devices will be. You think they can cram an Xscale, more RAM, bigger battery, etc. in there and still sell it for under $200? I might eat my words later, but I don't think they can...

[HR]

The argument does not make very much sense to me: money can be made by selling to the corporate world -> no money to be made in the consumer market. I don't follow this logic. It's like saying that Toyota can make money by selling Lexus cars but will not make money selling high volume cheaper cars. We all know that this is totally false. You can make money in both segments. They are not mutually exclusive.

The challenge is to recognize what consumers want and how much they are willing to pay as opposed to the enterprise market. Based on that information they should create devices targeted at this huge segment. MS can sell millions of OS licences and use this as a basis for selling additional software and net services. They implement this business model with PCs already. In addition, the ubiquity of PCs and the fact that you use the same software at work and at home will only serve as a cross-leverage to sell more PPC for business and for consumers.

Build an amazing wireless/multimedia/game PPC at a reasonable price and they will come.

[Jeff Kirvin]

The argument does not make very much sense to me: money can be made by selling to the corporate world -> no money to be made in the consumer market. I don't follow this logic. It's like saying that Toyota can make money by selling Lexus cars but will not make money selling high volume cheaper cars. We all know that this is totally false. You can make money in both segments. They are not mutually exclusive.

...

Build an amazing wireless/multimedia/game PPC at a reasonable price and they will come.


Okay, there's the problem, at least for now. So far, the components are still too expensive to make a device inexpensive enough for the consumer market that would still meet the requirements of the Pocket PC design spec. Even if you could cut a few corners, there would be no way to make money on it. You'd have a device that you sold for only marginally more than it cost you to make it.

As Palm is painfully discovering, there are no margins in the low end (read: consumer) PDA market. Until the technology gets cheaper -- or PDA usage becomes widespread enough for the economies of scale to come into play -- the only profitable PDAs are the high end (read: enterprise) models.

[Rob Alexander]

I disagree. When I bought my first Pentium computer in 1995, I paid $6000 CND for it. Today for $600 CND I can get something MORE powerful, and 1/10th the cost.

Yes, there is a minimum threshold that Pocket PCs will never fall below


Then we don't disagree. We're just quibbling over exactly where that point will be.


(ie: you'll never see one for $100, no matter what the features), but the $500 to $700 price range we're seeing now will come down. My guess would be we'll see a price reduction in the area of 30% in the next 24 months. Economies of scale and board-leve integration instead of off the shelf parts are HUGE factors here IMO.


I see no reason it can't be the 30% reduction you suggest, but that doesn't get it anywhere near the sub-$200 price point everyone's been talking about as 'necessary' for the consumer market. My point was the one you agree with... that there is some level it just won't go below, and that won't be a sub-$200 number. Of course, I could be wrong... it happened once. :wink:

[Scott R]

Parts required + MS licensing fee > $200. Simple mathematics.


I'll be interested to see what the price of the new Xscale-based Palm devices will be. You think they can cram an Xscale, more RAM, bigger battery, etc. in there and still sell it for under $200? I might eat my words later, but I don't think they can...

I'm not suggesting that they will. I think Palm OS4 devices (and perhaps even OS3.5 devices) will live on in the low-end sector. They'll still be 160x160 resolution and short on other high-end features. But these will continue to dominate the consumer market, IMO.

That said, I do think that Palm's OS5 (or OS6) specs will be lightweight enough that they may offer all of the functionality of PPC at a lower cost (due to requiring less ROM, less RAM, and less CPU speed). They'll most certainly cost over $200, but they will (IMO) still undercut most new PPC devices by at least $100.

Scott

[pda2012]

Yes, but PPC is not an OS poised to take advantage of that. Smartphone might be, but Microsoft's track record with mobile devices has not exactly been impressive.


What makes you say that? What about the Pocket PC makes it ill-suited for a mobile communications device?


Form factor, battery, memory management. That's for a non-connected device. For a wireless device, multiply the battery issue x2 (x3 if we talking about an always on device). Inbox is far too sluggish for true effective wireless usage. Form factor will keep most but the world's biggest geeks from using the device as a cell phone as well.

If MS didn't agree, they wouldn't be developing Smartphone. As to their history, they've been losing to Palm for years. Apparently PPC doesn't offer what buyers, enterprise or otherwise, are after. I'm not saying it's not a good platform for some users, it obviously is.

[Jason Dunn]

...sigh... :?


Form factor, battery, memory management. That's for a non-connected device. For a wireless device, multiply the battery issue x2 (x3 if we talking about an always on device). Inbox is far too sluggish for true effective wireless usage. Form factor will keep most but the world's biggest geeks from using the device as a cell phone as well.


What the heck does form factor and battery have to do with the OPERATING SYSTEM? The "problems" you're talking about related to HARDWARE DESIGN and those are issues that will solve themselves as Pocket PC ODM/OEMs move towards board-level integration and real engineering solutions instead of the off the shelf devices that are being built now. As for memory management, I agree there's some work to be done, but that doesn't make it inherently flawed use on a PDA with wireless capabilities.


If MS didn't agree, they wouldn't be developing Smartphone. As to their history, they've been losing to Palm for years. Apparently PPC doesn't offer what buyers, enterprise or otherwise, are after. I'm not saying it's not a good platform for some users, it obviously is.


Microsoft knows that there are multiple markets to go after, hence the Smartphone 2002. Don't mistake that for a supposed lack of faith in the Pocket PC platform.

Losing to Palm for years? Oh please...the Pocket PC is the first serious effort they had (the Palm-size PCs were failures). The Pocket PC is two years old in April, and in that time they've doubled their market share to around 25% or so (the figures seem to keep changing depending on which source I see). If they can double it again in the next 24 months, guess what? Parity with Palm. Is that a failure? No. Besides which, Palm will go under before the 24 months are up anyway...they've got one foot in the grave already as it is. :wink:

[Jason Dunn]

I see no reason it can't be the 30% reduction you suggest, but that doesn't get it anywhere near the sub-$200 price point everyone's been talking about as 'necessary' for the consumer market. My point was the one you agree with... that there is some level it just won't go below, and that won't be a sub-$200 number.


I don't agree that sub-$200 is what is needed. If a 32 meg Pocket PC, with all it has to offer out of the box, can hit $300 (30% off $500) it will be at a "consumer friendly" price point.

Remember that cheaper isn't always better - price points have powerful perception (holy alliteration Batman!) attached to them. Consumer will often pay MORE for something if the perceived value is there, and part of that perceived value is the PRICE. 8)

[Jason Dunn]

That said, I do think that Palm's OS5 (or OS6) specs will be lightweight enough that they may offer all of the functionality of PPC at a lower cost (due to requiring less ROM, less RAM, and less CPU speed). They'll most certainly cost over $200, but they will (IMO) still undercut most new PPC devices by at least $100.


"All the functionality of a PPC" and "Less ROM, less RAM, less CPU speed" is a paradox. The day that Palm can deliver all the bundled software of a Pocket PC (Word, Excel, File Explorer, Pocket Internet Explorer, MSN Messenger, Terminal Server, Inbox, MS Reader, Media Player, etc.) and not hit that 16 to 24 meg ROM point I'll eat my words. It's just not possible to deliver rich functionality in 2 megs of ROM. To reach application parity with a Pocket PC a Palm has to be loaded up with gobs of 3rd party applications, and even then it's not a fair comparison due to CPU differences, screen resolution for bitmaps, etc.

[Scott R]

What the heck does form factor and battery have to do with the OPERATING SYSTEM?
Actually, quite a bit. If the OS and bundled apps have a larger footprint, you need more ROM. The PPC OS, thanks to all of its neat built-in features, requires more processing power than the Palm OS. As a result, manufacturers needed to use CPUs which were more battery hungry, more expensive, and possibly even physically larger than the Dragonball. Apps are larger, which results in needing more RAM. One of the core features is MP3 playing, so add in all that that requires. The PPC environment is built on the 240x320 screen spec, etc, etc, etc. MS developed an OS which offered more (technically) than the Palm OS. But because of this, it also required more on the hardware side.

Scott

[Scott R]

"All the functionality of a PPC" and "Less ROM, less RAM, less CPU speed" is a paradox. The day that Palm can deliver all the bundled software of a Pocket PC (Word, Excel, File Explorer, Pocket Internet Explorer, MSN Messenger, Terminal Server, Inbox, MS Reader, Media Player, etc.) and not hit that 16 to 24 meg ROM point I'll eat my words.

Yes and no. First, I don't forsee Palm, Inc. bundling most of the functionality you just listed in ROM. I think they'll be content to keep it as a RAM add-on, where consumers can choose to install the apps they want or not install the ones they don't need. Furthermore, I think most of this functionality will continue to be offered by 3rd parties where Palm will strike deals to bundle these apps (on CD-ROM) with some of their devices. I believe Palm, Inc. stated at PalmSource that the version after OS5 would fit on the same ROM that comes with OS5. I believe that ROM size is 4MB.

Remeber, too, that Palm OS was designed from the ground-up for a PDA with very little RAM. Pocket PC is based on Windows CE which was designed to work on a variety of devices, supporting a variety of resolutions and other requirements. That flexibility comes at a cost both in the OS footprint and CPU speed.

Scott

[Steve Bush]

The Pocket PC is two years old in April, and in that time they've doubled their market share to around 25%.

If a 32 meg Pocket PC, with all it has to offer out of the box, can hit $300 (30% off $500) it will be at a "consumer friendly" price point.

Jason,

You may want to brush up on your math. :) Windows CE/Pocket PC was at 17.8% in 1999, 10.3% in 2001 and approx. 20% in 2001. So while it may have doubled its market share since last year (but not to 25% as you say) it has really only picked up a couple of points in the last 3 years.

Also, 30% of $500 is $150, which would bring the device down to $350, not $300. A 40% decrease would bring it down to $300.

[Jason Dunn]

Yes and no. First, I don't forsee Palm, Inc. bundling most of the functionality you just listed in ROM. I think they'll be content to keep it as a RAM add-on, where consumers can choose to install the apps they want or not install the ones they don't need. Furthermore, I think most of this functionality will continue to be offered by 3rd parties where Palm will strike deals to bundle these apps (on CD-ROM) with some of their devices. I believe Palm, Inc. stated at PalmSource that the version after OS5 would fit on the same ROM that comes with OS5. I believe that ROM size is 4MB.


You can't admit that you're wrong, can you? RAM installs from 3rd party companies isn't what I was talking about and you know it.

[Jason Dunn]

Actually, quite a bit. If the OS and bundled apps have a larger footprint, you need more ROM. The PPC OS, thanks to all of its neat built-in features, requires more processing power than the Palm OS. As a result, manufacturers needed to use CPUs which were more battery hungry, more expensive, and possibly even physically larger than the...


Did you read what I wrote? :roll:

Those are HARDWARE challenges that will work themselves out over time - we'll see small motherboards with more integrated components (the Xscale CPU has the capability to control things traditionaly handled by other parts of the motherboard).

Is a 32 meg ROM chip bigger than a 2 meg ROM chip? Unless they were to only make them a maximum size of 16 megs, which is no longer an issue, it's not like the 32 meg ROM chip on a Pocket PC takes up more space or power than an older 16 meg chip.

I don't dispute that if you have a more aggressive software platform, the hardware has to "grow" to match, but that threshold was reached with the iPAQ two years ago. Now that the Pocket PC OEMs see there's money to be made in this market, there will be some nice engineering going into the new devices to make them smaller, lighter, etc. And I never handed my iPAQ to someone and had them say it was too big or heavy...

[pda2012]

...sigh... :?

What the heck does form factor and battery have to do with the OPERATING SYSTEM? The "problems" you're talking about related to HARDWARE DESIGN and those are issues that will solve themselves as Pocket PC ODM/OEMs move towards board-level integration and real engineering solutions instead of the off the shelf devices that are being built now. As for memory management, I agree there's some work to be done, but that doesn't make it inherently flawed use on a PDA with wireless capabilities.

Microsoft knows that there are multiple markets to go after, hence the Smartphone 2002. Don't mistake that for a supposed lack of faith in the Pocket PC platform.

Losing to Palm for years? Oh please...the Pocket PC is the first serious effort they had (the Palm-size PCs were failures). The Pocket PC is two years old in April, and in that time they've doubled their market share to around 25% or so (the figures seem to keep changing depending on which source I see). If they can double it again in the next 24 months, guess what? Parity with Palm. Is that a failure? No. Besides which, Palm will go under before the 24 months are up anyway...they've got one foot in the grave already as it is. :wink:


What does OS have to do with form factor and battery life??? :roll:
Why else does a PPC device require that kind of power requirement and physical space? You don't think MS's hardware partners would make a smaller device if they could?

I'm intrigued how you think Palm PC and its dismal failure just didn't count. Also, you make it sound as if doubling market share again (and I'm not entirely sure that is actually what has happened) is practically a given or at least an easy thing to accomplish. Besides, didn't you say 24 months ago that Palm would already be out of business? Maybe it was that PPC would have already eclipsed Palm in market share? Sorry, I can't remember.

[Jason Dunn]

You may want to brush up on your math. :) Windows CE/Pocket PC was at 17.8% in 1999, 10.3% in 2001 and approx. 20% in 2001. So while it may have doubled its market share since last year (but not to 25% as you say) it has really only picked up a couple of points in the last 3 years.
Also, 30% of $500 is $150, which would bring the device down to $350, not $300. A 40% decrease would bring it down to $300.


I was wrong on the price point (I did a 40% discount), but you may also want to brush up on your history. :-) The Pocket PC made it's debut in April of 2000, so in two months it will be two years old. Here's an article I found about Europe:

http://news.com.com/2100-1040-254080.html?legacy=cnet

"By December, Palm's market share had dipped slightly to 55 percent, from 59 percent in January 2000. By contrast, Hewlett-Packard and Compaq Computer, the two largest manufacturers of Pocket PC devices, combined for 31 percent of the market, up from a combined 18 percent at the start of 2000. Casio and other Pocket PC manufacturers conspired for a few percent more."

Even if I take your worse-case scenario of 20%, what did they have with Palm-size PCs....5% maybe? So I'll give you a 15% growth in two years. If they keep growing at this rate, 35-45% worldwide in another 24 months is just dandy as far as I'm concerned.

[pda2012]

I never handed my iPAQ to someone and had them say it was too big or heavy...


I have, it's usually been the first thing out their mouth. Also, your solution seems to be to just throw more hardware at the problem. This even though were talking about hardware that isn't even currently available. How about designing an OS that gives people what they want and need? Seriously, if PPC is what people want, why aren't they buying?

[Jason Dunn]

Besides, didn't you say 24 months ago that Palm would already be out of business? Maybe it was that PPC would have already eclipsed Palm in market share? Sorry, I can't remember.


In October of 2000, when I first started this site, I said that Palm would be a smoking husk of a company in 24 months. So they have until October 2002 to prove me wrong. I think Sony's involvement might have messed up my predictions - the first Clie's sucked so bad I didn't think they'd come back for another round... :-)

As for the rest of your points, "whatever" - this is rapidly become like a thread on PDABuzz and it's really disturbing me.

[pda2012]

In October of 2000, when I first started this site, I said that Palm would be a smoking husk of a company in 24 months. So they have until October 2002 to prove me wrong. I think Sony's involvement might have messed up my predictions - the first Clie's sucked so bad I didn't think they'd come back for another round... :-)

As for the rest of your points, "whatever" - this is rapidly become like a thread on PDABuzz and it's really disturbing me.


Yes I know, things like the Clie keep happening that require you to adjust your assessments. What will be next, OS5, i705 sales figures, etc.?

Just for the record, I think saying 'whatever" is an attempt to take the easy way out. But sure, if you want, we'll let you off the hook then. :lol:

[Ed Hansberry]

Parts required + MS licensing fee > $200. Simple mathematics.

I have never seen anyone prove that the MS licensing fee is more than a few bucks (&lt;5) more than the PalmOS license.

And here is another tip for you as you try to catch the clue-train. Palm is getting ready to start losing MORE money - they will have to buy the license for their devices from PalmSource.

[Jason Dunn]

Just for the record, I think saying 'whatever" is an attempt to take the easy way out. But sure, if you want, we'll let you off the hook then. :lol:


In this case, what it means is that I've suddenly realized that this is a pointless threat and I'm wasting my time trying to have a rational discussion - you're not here for that right? :?

[Scott R]

You can't admit that you're wrong, can you? RAM installs from 3rd party companies isn't what I was talking about and you know it.


I'm not sure what you mean. You said...


"All the functionality of a PPC" and "Less ROM, less RAM, less CPU speed" is a paradox. The day that Palm can deliver all the bundled software of a Pocket PC (Word, Excel, File Explorer, Pocket Internet Explorer, MSN Messenger, Terminal Server, Inbox, MS Reader, Media Player, etc.) and not hit that 16 to 24 meg ROM point I'll eat my words. It's just not possible to deliver rich functionality in 2 megs of ROM. To reach application parity with a Pocket PC a Palm has to be loaded up with gobs of 3rd party applications, and even then it's not a fair comparison due to CPU differences, screen resolution for bitmaps, etc.

My point was that Palmsource has no intention of bundling many new applications into the ROM. So, the ROM will stay small. Furthermore, with a wide variety of consumers, many of whom don't want several of the apps you listed, they can get by with having 8-16MB of RAM on their low-end devices, thus maintaining the price advantage. Let's not confuse building in core OS features with building in applications. In converting to ARM compatibility, Palm can build in the necessary hooks for multimedia, multitasking, and several other features. This will all require more ROM space, but not necessary that much more. Bundling apps into ROM is where ROM size becomes important.

Scott

[pda2012]

Just for the record, I think saying 'whatever" is an attempt to take the easy way out. But sure, if you want, we'll let you off the hook then. :lol:


In this case, what it means is that I've suddenly realized that this is a pointless threat and I'm wasting my time trying to have a rational discussion - you're not here for that right? :?


Actually, that's exactly why I'm here. Apparently however, you're not capable of it. Go back and read your comments in this thread. They get increasingly abrasive, not just to me. What, when someone doesn't agree with you (yet offers real world examples for his or her own points) they're engaging in pointless discussion?

I'm afraid you and Ed H (telling posters to "catch the clue train") need to relax and think before you speak.

[Jason Dunn]

Actually, that's exactly why I'm here. Apparently however, you're not capable of it. Go back and read your comments in this thread. They get increasingly abrasive, not just to me. What, when someone doesn't agree with you (yet offers real world examples for his or her own points) they're engaging in pointless discussion?


In the real world of online communities, it's called trolling. Time for a front page post - you and several others seem to misunderstand what a site called "Pocket PC Thoughts" is really for and I evidently need to set the record straight.

[HR]

Okay, there's the problem, at least for now. So far, the components are still too expensive to make a device inexpensive enough for the consumer market that would still meet the requirements of the Pocket PC design spec. Even if you could cut a few corners, there would be no way to make money on it. You'd have a device that you sold for only marginally more than it cost you to make it.

As Palm is painfully discovering, there are no margins in the low end (read: consumer) PDA market. Until the technology gets cheaper -- or PDA usage becomes widespread enough for the economies of scale to come into play -- the only profitable PDAs are the high end (read: enterprise) models.
I am not saying that MS should release this product tomorrow, but it should put this as a priority or at least as a consideration for, maybe, for the .net release. I am also not saying it is going to be cheap. And definitely, I am not saying they should compete at the &lt;$100 Palm organizer segment where no one will ever make money.

Here is what I am saying:
MS should plan a lighter version without the unessential business software. The work has been done. They don't have to spend much money. In addition, MP3, media player etc. are there too. So from MS's point of view, there is not much work that has to be done to create a consumer edition except for polish. Hence incremental cost will be low for MS.

True, hardware will be expensive, but look at it in terms of value. People buy after some internal analysis of cost vs function/prestige, etc. It's called value proposition. Sure, $1000 is a lot of money for a toaster over, but not a lot for a dining room set. People who buy the dining room set think that it is a good value. Similarly, if consumer PPC is brought to a sweet spot of price point / function combination, they can do well.

Look at MP3 players. For the sake of argument let's say that they go for $200-$400. Now for another $200 you saw this MP3 player that also can play videos (music videos for GenX,), movies and is a wicked game machine, plus it can do a whole lot of other PIM and what's not. Then, suddenly it not bad value. I know many people who will add the extra $$$. Beside, Palm OS5 is going to be similar to PPC in terms of hardware and hence cost.

Now, I am not saying the MS is ready now. But they should plan for it and not ignore this market.