How Does The Mobile Devices Division in Microsoft Stack Up? [Archive]

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Ed Hansberry

11-19-2002, 05:00 PM

About once a quarter, I'll post the financial results of one of the Pocket PCs competitors, usually Palm. It is easy to do because Palm is a stand alone company. Microsoft, on the other hand, is more of a big conglomerate of technology items. Picking the Pocket PC performance out of that can be like trying to highlight just the letter "i" with your stylus. Microsoft recently reorganized their business into 7 segments which makes this endeavor a bit easier. That and the Excel spreadsheets downloadable from their web site. ;) The 7 divisions are: • Windows and Embedded Operating Systems • Office, other standalone apps, Professional Product Support (those $245 phone calls I presume) • MSN Networks and access • X-Box, consumer hardware/software, PC Games, TV Platform • Great Plains, bCentral, Navision • Server platforms, .NET Enterprise, CALs, etc. • Pocket PC and Smartphone The revenue is broken down for the last 5 quarters below with the CE/Mobile Device line highlighted: <img src="http://www.pocketpcthoughts.com/images/hansberry/2002/20021119-msrevenue1.jpg" /> See below for a larger chart that goes back to the summer of 2000. To put these numbers in perspective, PalmSource, the Palm OS division which includes sales from ebook seller Palm Digital Media, formerly known as Peanut Press, had $15.2M in sales for their quarter ended August 30, 2002. <!> <img src="http://www.pocketpcthoughts.com/images/hansberry/2002/20021119-msrevenue2.jpg" /> I was actually a bit surprised that the Mobile Devices division of Microsoft is generating more quarterly revenue than PalmSource, even more so when you consider PalmSource has non-OS revenue from ebook sales, though I don't know what that number is. Now, according to a <a href="http://news.com.com/2100-1001-966219.html">CNET article</a> the Mobile Device division lost $33M on that $17M in sales. Contrast that to the $6M PalmSource lost on $15M in sales. Again, it isn't totally apples to apples here for several reasons. <img src="http://www.pocketpcthoughts.com/images/hansberry/2002/20021119-msrevenue3.jpg" /> The first reason is, I don't know is how much additional revenue Microsoft earned from additional Client Access Licenses (CALs) for Terminal Server, Exchange or SQL Server that were purchased to support Pocket PCs in the enterprise, nor how much money was generated from sales and CALs of Mobile Information Server or Windows 2000 Server, or additional sales/upgrades of MSDN or developer tools for mobile application developers. Microsoft also sells consulting services to some of their customers and I am sure there is some revenue for that in the Q1 numbers, but again, no clue how much. All of those numbers (CALs, Server products, consulting) are buried in Server Platform line above. PalmSource includes all of their server and dev tool revenue in that $15.2M. I doubt very seriously if it does much to close that $33M loss for Microsoft, but it does eat away at some of it. It isn't unreasonable to assume that some desktops were upgraded from Windows 95 or Office 95 as people deployed the new Pocket PC 2002 devices which require Windows 98 and Office 2000 at a minimum. Again, not staggering dollars, but some. The second reason is, Microsoft is swinging for the fences with their Smartphone platform. They started the Smartphone as a Pocket PC scaled down, but that lasted about 3 minutes before they decided a few years ago the best route was to start from the basic Windows CE operating system and build an OS for a phone from the ground up. To date, Palm's offerings in this area are the basic OS4.x operating system that at best has been tweaked for phones, hence the need to whip out a stylus for many tasks. That swinging on Microsoft's part is a huge amount of R&D expenses and is really competing in an arena PalmSource has cut major corners on. Furthermore, PalmSource has allowed its licensees, like Handspring, to shoulder some of that development cost in products like the Treo. So what can we draw from all of this number crunching? Not much really. With $17M if revenue in their Mobile Device division that has at best 30% market share world wide compared to $15.2M from PalmSource with the bulk of the rest of the market share, it does suggest Microsoft has the better business model. I know with the $6M loss PalmSource is showing is much better than the $33M that Microsoft is showing, but again, Microsoft is poised for staggering growth in the coming years and is preparing to battle the real contender in the mobile communication space. That is Nokia, not PalmSource. Spending $2 in expenses, much of which is R&D, for every $1 in revenue shows Microsoft is working for the next 4-5 years, not next quarter. Being subsidized by Windows and Office which collectively lose $33M each quarter in rounding errors ;) really helps the Mobile Device group to keep their eyes on the future and not next week's conference call with Wall Street analysts.

Foo Fighter

11-19-2002, 05:16 PM

The bottom line is that MS isn't making any profit from its CE/Mobility group. Windows and Office are still the sacred cash cows. No surprise there.

xbalance

11-19-2002, 05:54 PM

Obviously, it is very difficult to compare MS numbers to Palm when the whole SmartPhone development is being included in these numbers. Not to mention all the other CE development that is probably going on at MS to enable smart appliances, smart toothbrushes, smart [fillin wise crack].

I would love to see the projected revenue numbers. I have to believe there are some serious spikes in revenue 2-3 years out. MS is not in this business to keep PALM from making money (what they are accomplishing right now). They are in it to make good money and to dominate the market. Nothing in their history leads me to doubt their ability to do just that.

I do love seeing the numbers, thanks for this cool post.

Bob Anderson

11-19-2002, 05:57 PM

Well, let's put it this way... you don't have 40 billion $'s sitting around for nothing!

Microsoft, unlike most American corporations, does invest for the future... and if you look at the growth in the CE/Mobility revenue category from 2000 to present you understand why they feel this is a good investment. The groundwork is being laid for a "mega" business unit in a few years.

Now, the question in my mind is, what happens to the Mobility group if the Windows/Office divisions start to not do so well? While I think the monopoly of the desktop and office suites won't wither away anytime soon, you've got to wonder.

So the next time I buy a copy of Windows XP or Office XP, I'll remind myself that I'm also investing in my Pocket PC's future! :wink: Yeah, that'll make me feel better about the $'s I'm spending!!!

xbalance

11-19-2002, 06:00 PM

Isn't it possible that MS strategy is partly motivated at protecting their cash cow, Windows and Office by preventing would be competitors from building their own cash cow that funds a competitive attack on Windows and Office?

Spend an additional $33M and keep PALM from ever having money to expand beyond their current market. If MS were not in this market, I have to belive PALM would well within the black and looking to move into new markets. The desktop market would be a good progression.

Foo Fighter

11-19-2002, 06:02 PM

Foo Fighter

11-19-2002, 06:04 PM

...keep PALM from ever having money to expand beyond their current market.

They are expanding beyond their current markets.

entropy1980

11-19-2002, 06:10 PM

...and to dominate the market. Nothing in their history leads me to doubt their ability to do just that.

Except that Pocket PC's marketshare is declining, while PalmOS is growing again. It seems unlikely Microsoft will ever dominate the PDA market. Consumers vote with their wallets, and they don't seem to want PPC.

We will see what their wallets say when offer a choice between a $500+ Palm (read: Tungsten) to a $199-299 Pocket PC with more features, memory, and 100% of applications working ( not 80% like Palm claims with OS 5) :roll:

Foo Fighter

11-19-2002, 06:14 PM

entropy1980

11-19-2002, 06:20 PM

We will see what their wallets say when offer a choice between a $500+ Palm (read: Tungsten) to a $199-299 Pocket PC

Palm will sell twice as many Tungstens between now and January than Dell will with its $199 PPC. It doesn't matter how cheap the Dell is because it runs a less popular OS. The market has already chosen PalmOS as the "standard" platform. A $199 PPC isn't going to change that.
Then the wallet arguement is null, because what your saying is price is irrelevant (which we know isn't true)people buy what is cheap (Palm has proven this in the past with their sales) just because Palm went up a couple of percentage points in a quarter or two doesn't mean squat I would argue that it was reaction to low inovation and selection of Pocket PCs which is shifting now in favor of PPCs. And while they may sell 2X the Tungstens as Dell's Axim, they won't sell 2X the Tungstens of HP's 1910,V35, and Axim.

xbalance

11-19-2002, 06:21 PM

Palm will sell twice as many Tungstens between now and January than Dell will with its $199 PPC. It doesn't matter how cheap the Dell is because it runs a less popular OS. The market has already chosen PalmOS as the "standard" platform. A $199 PPC isn't going to change that.

Time will tell

Foo Fighter

11-19-2002, 06:33 PM

...because what your saying is price is irrelevant

Not at all. On the contrary, Zire is currently the top selling PDA at Amazon.com.

I'm saying price isn't the only factor. Price + platform popularity (ubiquity) + largest volume of third party software = winning platform. In the case of Zire...it's cheap, and it runs PalmOS.

which is shifting now in favor of PPCs.

Really? That's odd. I haven't seen any innovation from the PPC camp since the e740. IMO, PPCs are getting very boring. Just a bunch of clone look-a-likes.

Where's PPCs answer to the Sony NX?

And while they may sell 2X the Tungstens as Dell's Axim, they won't sell 2X the Tungstens of HP's 1910,V35, and Axim.

Maybe not, but Tungsten, Zire, Sony Clie NX will outsell PPC by a huge margin..as they do now.

entropy1980

11-19-2002, 07:11 PM

I'm saying price isn't the only factor. Price + platform popularity (ubiquity) + largest volume of third party software = winning platform. In the case of Zire...it's cheap, and it runs PalmOS.

Tungsten runs OS 5 as you know which Palm claims 80% compatibility (of which has to be programmed to Palm's standards no hacks/work arounds) so that hurts the ubiquity arguement if you start segmenting what software you can run on what model.

Really? That's odd. I haven't seen any innovation from the PPC camp since the e740. IMO, PPCs are getting very boring. Just a bunch of clone look-a-likes.

The innovation is in the price to performance ratio. More bang for your buck. Last I checked there was no Palm with Wifi, (they are just getting bluetooth integrated),No Palm with an integrated biometrics, No Palm with Native support for Word, Excel, MP3 (except Sony on the Mp3), and No integrated Web Browser(worth anything anyway). IMHO Palm is playing catch-up with features they calimed were irrelevant. Besides if Palm was doing so well why the heck do they lose money every quarter? If you take Microsoft's ubiquity on the desktop they don't post losses there so why does Palm continue to do so if they are the market leader and ubiquitous in the handheld market?

Maybe not, but Tungsten, Zire, Sony Clie NX will outsell PPC by a huge margin..as they do now.

Yeah but I didn't even take into account the high end market or Toshiba. Don't underestimate corporate spending on features such as integrated WiFi and or Biometrics, if you company has a wireless LAN PPC is the only way to go, if you have sensitive data then PPC is the only way to go. So while industrial design may lag (read: clones) i believe that's to come with the next PPC OS.

Bob Anderson

11-19-2002, 07:29 PM

Wow.. who would have thought an analysis of MSFT profit/loss statements would lead to a Palm vs PPC war of words!

Here's my two cents worth on the subject.

Yes, PPC marketshare dipped a little bit in recent history, I believe that to be a bit of an oddity, not a trend. With the new PPC low price entries into the marketplace, I think PPC is going to gain back a nice chunk of market share.

Plus, as I've been harping on for a while now, I'm sure MSFT is not that far off from releasing a new version of PPC -- one that will (IMHO) take advantage of Xscale -- and when that new version comes out, it will do for market share what PPC2002 did ... make it go up substantially.

Let's face it, Microsoft is in this for the long haul! They will "refuse to lose". They've got a greater depth of knowledge and resources and Palm licensees will not maintain their market share for much longer. So it seems a bit unrealistic to say Palm will never drop below PPC...

Now, I personally plan on boosting PPC marketshare with my purchase of the ipaq 5450!!

Foo Fighter

11-19-2002, 07:31 PM

...so that hurts the ubiquity argument if you start segmenting what software you can run on what model.

Even that "fragmented" software market still offers you more available software than PPC.

The innovation is in the price to performance ratio. More bang for your buck.

So. PalmOS device will continue to fall in price and offer more features for less money. That's the normal cycle in a competitive market.

Last I checked there was no Palm with Wifi, (they are just getting bluetooth integrated),

You'll see that in the coming months.

No Palm with an integrated biometrics,

That is a niche feature that has no value to the consumer. Vertical markets will appreciate this form of security, but that's about it.

No Palm with Native support for Word, Excel,

Not true. Many of Palm's products ship with Documents to Go..which is superior to Microsoft's "Pocket Office".

MP3 (except Sony on the Mp3),

Tungsten will support MP3. Real is developing playback software.

and No integrated Web Browser(worth anything anyway).

Again, you are wrong. Several PalmOS device (including Tungsten) ship with bundled browsers.

IMHO Palm is playing catch-up with features they claimed were irrelevant.

And they are doing quite well at it.

Besides if Palm was doing so well why the heck do they lose money every quarter?

Well, aside from the poor economic climate, they have battled with Sony and Handspring in brutal price-war. Margins were thin....volumes were down, hence lower profits. Despite the rhetoric you may hear, Palm is not dying. Sales are increasing, market share is rising (at Microsoft's cost), and the stock is going up again. The slide is over, Palm is regaining traction.

If you take Microsoft's ubiquity on the desktop they don't post losses there so why does Palm continue to do so if they are the market leader and ubiquitous in the handheld market?

Oh come on now. Those are two diametrically opposed market segments. First of all, Microsoft never reduces margins on Windows. They don't have to because they have a monopoly on the desktop. They don't have to compete. Palm doesn't have that luxury. They are up against Sony and Handspring. If one drops prices, the other must follow.

So while industrial design may lag (read: clones) i believe that's to come with the next PPC OS.

We'll see.

toshtoshtosh

11-19-2002, 07:38 PM

There's one more argument in the Palm vs PPC discussion. Microsoft has NEVER lost a battle :). And that's been true in situations where they were offering the weaker product. I don't see them losing a battle where they are offering a superior product.

And before you say PS2, let me say XBox2, XBox3, Xbox4, Xbox5...

Endless well of money always helps :D. Hell, if it comes down to it they'll BUY Palm and put their name on it.

entropy1980

11-19-2002, 07:43 PM

Foo you missed my point entirely Palm doesn't have native native support for the aforementioned sure they bundle stuff but it's not native. As far as browsers go name a decent browser that can accomplish everything either Pocket IE, or Bitstream's Thunderhawk? As far as price darn right they will fall... why? No one in their right mind would pay 500 dollars for a Palm with virtually no significant changes over previous OS 4.x. Sure they are on ARM now but only by using an emulator. OOO they make the bottom slide to make it short? Come on! Vertical markets are where a huge amount of money is at. If Sony and Handspring are such problems then drop them as linscencees(sp) , why won't they? They can't you know that I know that. The fact is Palm will kill itself and end up being bought up by Sony or someone else because I can't and won't survive on it's own. Pocket PCs have cought up on price now and they won't look back. Next up will be features and design, your crazy if you think Microsoft will roll over and die.They will learn to adapt quicker and better (they have in just aout every other market they try, try and try again till they get it right) You will see PPCs at every segment of the market. Dell will commoditize the market others will have better asthetics. Palm can't afford to mess up MS can till they get it right, and when they do (on price and features) Palm can say good night or hello to a new owner.

Ed Hansberry

11-19-2002, 08:23 PM

Wow.. who would have thought an analysis of MSFT profit/loss statements would lead to a Palm vs PPC war of words!
I figured it would go there, thus my decision to put it in the COMPETITION section. :D

Foo Fighter

11-19-2002, 09:15 PM

...sure they bundle stuff but it's not native.

What difference does it make whether the software is stored in RAM or ROM. It gets the job done, and it works much more seamlessly with Microsoft's Office software than PPC.

As far as browsers go name a decent browser that can accomplish everything either Pocket IE, or Bitstream's Thunderhawk?

Hmm...well there's Handspring's Blazer browser, and Palm's Web Pro browser is every bit as capable as PIE.

As far as price darn right they will fall... why? No one in their right mind would pay 500 dollars for a Palm

Ha! Six months from now Tungsten will still lead PPC in sales, and everyone will be scratching their heads wondering why on Earth anyone is paying more for Palm when they can have PPC. :roll:

with virtually no significant changes over previous OS 4.x.

Virtually no *visible* changes over OS4.1. OS5 brings the Palm platform over to ARM/xScale. And the best is yet to come. With the release of OS6 next year, PalmSource will begin making customized embedded OS's for MP3 players and other digital devices.

Sure they are on ARM now but only by using an emulator.

Wrong. The OS does not run in emulation. It is ARM native. Non-native OS5 apps run in the emulation layer (PACE). But the OS itself is not in emulation.

OOO they make the bottom slide to make it short? Come on!

Have you looked at a Tungsten? That little slider illustrates why PPC is never going to displace PalmOS. It makes the device more wearable and compact when necessary. Let's see...iPaq has the sleeve system which makes it BIGGER? No thanks.

Vertical markets are where a huge amount of money is at.

Yes, but that market has absolutely nothing to do with consumer electronics. Unless of course your next PDA is going to be a Symbol handheld scanning device?

If Sony and Handspring are such problems then drop them as licensees(sp) , why won't they? They can't you know that I know that.

You are confusing Palm with PalmSource. Palm is the hardware company, PalmSource is the OS subsidiary. Palm can't drop Sony anymore than Dell can drop Toshiba.

The fact is Palm will kill itself and end up being bought up by Sony or someone else because

That's an opinion...not fact. And since we're on the subject of killing....what impact do you think Dell is going to have on the PPC market? I can tell you that all of the smaller PPC players are going to vaporize quickly. Say goodbye to that Razor Zayo. And if Dell really starts stealing marketshare away from Toshiba and HP, it will drive those players away. Instead of growing PPCs marketshare, it will shrink it by killing away the competition. Toshiba will be first to go.

Pocket PCs have caught up on price now and they won't look back.

No, Dell has caught up in price. The others may not want to go forward.

your crazy if you think Microsoft will roll over and die.

Microsoft, die? Never, but they may give up this fight and concentrate on markets where they actually stand a chance of winning...like MSN, xBox...

You will see PPCs at every segment of the market.

Sure we'll see PPCs in every segment of the market. The question is...will people buy them? You can lead a horse to water but you can't make him drink it.

ThomasC22

11-19-2002, 10:25 PM

Palm vs. PocketPC - Foo, my man, what happened? I mean, I know most people think you're a Palm fanatic but I've always found you pretty balanced, but this thread you are just Mr. Palm!

As for the issue, I really think it's far too early to proclaim an "industry standard" platform at this point. Enterprise sales are still nothing, consumer sales still have a lot of room to grow, and there are a lot of first-generation PDA users (which started to come in with the m100 series type devices) who are now looking to get a more "serious PDA". A few predictions and things that I think will make the difference in the Coming year:

Enterprise: I think PocketPC will take off here. Dell has a huge customer base and companies like buying from one vendor (which is what made Dell so popular in the first place). But, for this to work Dell has to address the main issue for enterprise right now which is Cheap Wirless.

The problem with current PocketPC implementations of Wireless is that (A) their Wi-Fi and (B) they are too far reaching and hence too expensive.

OK, I'm going to go out on a limb here and say what I think many people are already beginning to realize, Wi-Fi is a waste of most companies time. Sure, in a warehouse it might be great but even then I think almost any company I know of would prefer a secure GSM/CDMA/TDMA connection on a PDA. The whole point of wireless is to mobilize your staff and if they're tied to your hot spots they might as well be tied to a cable plugged into the wall.

As for too far reaching, honestly, I really don't want my staff to be able to access the web on their PDA. E-Mail and whatever little app I provide them will be more than enough for me...but what I do want is unlimited access. I don't want to be charged a nickle every time a staff member checks their E-Mail. This is the problem with PPC implementations right now and why most companies are choosing devices running on Pager networks (e.g. Blackberry and Palm i705) rather than PPCs running on phone networks.

Consumer: For me, I really think "average consumer" sales of PDAs boils down to attractiveness and "wow" features and sadly, until PPC manufacturers step up to the plate and compete with Sony I think the Palm platform will win out here (Biometric scanners are great but I know my grandma would prefer a Digital Camera).

So for me, I think they stay even for a while here. I will agree with Foo in that the PPC manufacturers (or at least one of them) have to start looking at some hardware innovation that doesn't include built in wireless.

Ed Hansberry

11-19-2002, 10:45 PM

...sure they bundle stuff but it's not native.

What difference does it make whether the software is stored in RAM or ROM. It gets the job done, and it works much more seamlessly with Microsoft's Office software than PPC.
For the simple reason if I need to send a document or spreadsheet to another Pocket PC user, I know darn well they can open it. With Palm, you don't know, so it inhibits productivity.

It is also another thing for IT Admins to install and configure for a mass deployment.

SOrt of funny hearing the Palm crowd, the crowd that 2 years ago said "you don't need spreadsheets and documents on the device. It is about the PIM stupid" and today go "Oh, well, not only do you need it, but it has to have this level of functionality."

Which is it?

Jonathon Watkins

11-20-2002, 12:21 AM

Well I find Foo's counterpoints refreshing. I may not agree with them all – but it is goof to think about these things. MS ALSWAYS performs best in second place. Yes – where is the PPC version of all those lovely Sony toys. Where are our 480x320, or even 640x320 screens. Palm has a larger market share – and many people will continue to buy the market leader. (Though I have hopes to entice a few upgraders over to the light side of the force. :flasingsmile:

The latest version of PCPro in the UK just came out – 18 different handhelds reviewed – who won? The Tungsten T! It got a features score of 119, while the Toshiba e740 got 114 and the IPAQ 3970 got 114. Huh??????? What WHERE they smoking? :shocked!: :confused totally: :eek: :drinking: :crazyeyes:

entropy1980

11-20-2002, 12:32 AM

Well we could go on and on so I will end on this note:
FOO I am right and you are wrong! :twisted: j/k in the end I guess we can agree to disagree and let the market decide. I am going to bookmark this thread and in 6 months we can revisit and see who was right. I firmly believe that MS' no.1 priority was to get price competitive and take that edge from Palm, next will be design/features. You spoke of OS 6 and I sure that will be another 18 months before we actually see it (come on OS 5 took like forever to come out and they OS 6 is the big jump? When is it going to come out .... when we land on Mars?) We haven't even seen a hint of what MS will release but I am every bit as sure that it will be big based on the fact they have been so tight lipped. PPC 2k2 was incremental upgrade and it made big strides can you imagine what a full upgrade by MS will be like? I think it will make big waves by including features people want and need, all at a now more affordable price than Palm.

Timothy Rapson

11-20-2002, 01:42 AM

Isn't it possible that MS strategy is partly motivated at protecting their cash cow, Windows .

Your second comment here contradicts your first. The second is correct.

Microsoft is all about playing defense and protecting the sacred cow. Windows.

That is why they had to create and give away a browser that runs only under Windows, not Linux like Netscape would.

That is why they have Word, and the Office Suites, and the PPC. When Palm introduce the Audrey and it looked like they could really go somewhere as an operating system producer, Microsoft stepped in. They do not care about PPC, phones, Office or any of the rest. It is all there to keep the money flowing in from Windows/DOS.

Just my opinoin, but it fits with every move they have ever made.

Timothy Rapson

11-20-2002, 01:50 AM

="entropy1980. Besides if Palm was doing so well why the heck do they lose money every quarter

: :roll: Palm is winning because they are losing less? :lol:

That high end is getting to the price of a laptop. The enterprise market would far rather pay $1000 for each of their guys to have a laptop (which they carry in their brief case anyway, not their pocket) than $800 for a Ipaq 5900 with WiFi card, 128meg flash card for backups, and software that still won't do what the really want.

Timothy Rapson

11-20-2002, 02:03 AM

Plus, as I've been harping on for a while now, I'm sure MSFT is not that far off from releasing a new version of PPC -- one that will (IMHO) take advantage of Xscale -- and when that new version comes out, it will do for market share what PPC2002 did ... make it go up substantially.

Let's face it, Microsoft is in this for the long haul! They will "refuse to lose". They've got a greater depth of knowledge and resources and Palm licensees will not maintain their market share for much longer. So it seems a bit unrealistic to say Palm will never drop below PPC...
!!

Wish I didn't have to agree. Wish I could see it Foo's way. But, I think you are probably right. How can Palm compete with an OS maker with MS resources, both intellectual and finanacial?

For now, the most likely thing I see is that both Palm and PPC may die as phones take the low end functions and price points and OQOs, and subnotebooks at every lower price points take the $500+ market.

What puzzles me is the complete lack of any new or worthy model Palm has between the $99 Zire and the $499 Tungsten? Think Palm has a M130 replacement to surprise us with? Or are they going to sit back and let the PPC overproduction eat the PPC market out from under itself?

Yesterday, I was looking back at our predictions for the year in an old thread at PDA Buzz (started by his Fooness, his own self). No one predicted PPCs at $200 to $300. Compaq, Toshiba, and ViewSonic surely intended to be selling their low end models for $400, not $300 and less. Bet Palm loses less per unit selling M130s at $150 this Christmast than Compaq does selling those h1910s, but Palm can no longer afford to lose money on anything. HP, Dell, Toshiba, and surely Microsoft can.

Foo Fighter

11-20-2002, 03:32 AM

Yesterday, I was looking back at our predictions for the year in an old thread at PDA Buzz (started by his Fooness, his own self)..

Ha! I forgot about that thread. I'll have to post it here next month. All in all, I did pretty damn good. Sony didn't quite mop the floor with PPC, but it did surpass it in sales (Sony recently stole the number two slot away from HP). I was right about Handspring. They did receive a cash infusion (from Qualcomm) and they did change their focus (to communicators). And this was somewhat of a recovery year for Palm. They regained traction in the market...they are reorganizing and spinning off the OS division. I hit the nail on the head with Casio...they did leave the PPC market.

Not too shabby.

Duncan

11-20-2002, 12:14 PM

I think there are three determining factors in the average persons choice of PDA - price, features and comfort. The relative values of each of those varies for each person but for a majority 'price' is a greater consideration than the other two. Once you have a PDA you can afford, fulfilling at least one of the other two criteria is enough.

Palm has provided a level of comfort to those who feel a high feature set is unaffordable and so go for the simple PIM model that Palm does so well.

But - what happens when a high feature set is made affordable - e.g. with a Dell Pocket PC? The price is OK, the feature set is good and the OS is recognisable (and, therefore, comfortable). What about Palm OS devices with a high feature set? These suddenly become the ones that are unaffordable - and the Palm OS is not a comfortable one when used with high end features (my opinion yes - but it never ceases to amaze me how colleagues with Palms seem reluctant to explore what they are capable of - and often do things on their Palms the hard way - can pick up my Loox or iPAQ and find their way about it with enthusiasm and ease!)

So the market becomes stratified -

at the bottom - Palm Zire - cheap, comfortable in regards to what it is good at (PIM), high feature set sacrificed.

Lower middle - Dell and similar low-end Pocket PC as they come - cheap enough for many, comfortable to use and high specced.

Upper middle - Palm Tungsten and most Pocket PCs - an battle for hearts and minds between differing high end feature sets and differing areas of comfort - all at a roughly similar price.

High end - Sony NX-70V and iPAQ 5450 - appealing to enthusiasts, those that want something different, certain corporate markets etc. - backed by higher profits and remarkably efficient marketing...

Then - off in a place all of their own (since I would defy anyone to predict where this market segemnt is going...) - PDA Phones...

Does this mean that Pocket PCs will dominate? No. But I do believe it means the market is opening right up and Pocket PCs and Palm OS devices will compete on a more equal footing.

Increase in market share by Palm is meaningless at the moment. A $99 Zire, along with the 'aren't they cool' Clies (with all of Sony's marketing skills behind them) and the novelty of the Tungsten (rapidly wearing off) will probably boost Palm further still - but given time, and changes in the Pocket PC portfolio, this WILL change...

Hitman2

11-20-2002, 12:27 PM

Price + platform popularity (ubiquity) + largest volume of third party software = winning platform. In the case of Zire...it's cheap, and it runs PalmOS.

I will grant you there is more freeware and so on available for the Palm OS.

Really? That's odd. I haven't seen any innovation from the PPC camp since the e740. IMO, PPCs are getting very boring. Just a bunch of clone look-a-likes.

I don't know... I think there are more good choices than ever before. And having just migrated from the Palm OS camp, I have to say that most of them are also boring clone look-alikes. :)

Mark (NL)

11-20-2002, 03:00 PM

Man these threads are always so funny :lol:

Especially when you are reading them in Europe and know that there is a HUGE difference between the states and Europe when it comes to market share!

But please guys go on and try to predict what is on our plate for the next 10 yrs or so :wink: I for one will be reading it with great interest (not to mention pleasure, brings back the Amiga vs ST days, Netscape vs IE and Windows vs Apple ahhhhh and we know what happened with the latter two... <lol> )

my personal thoughts on this?
I for one would've put my money on the PocketPC in a heartbeat when you would have asked like say a year ago... At the moment I'm not so sure anymore... I see SERIOUS lack in developement on the PocketPC side both on the Hardware as well on the OS side. I still can't believe the resolution on a PocketPC (or CE Handheld for that matter) hasn't changed anything for the last 3 yrs (and I'm saying 3yrs to be on the save side since it must actually be longer). I can't believe that we still are working on a platform based on WinCE 3.0 while all M$ preaches is .NET. Is that because we skip a version and we will get WinCE 5.0 with the next pocketpc version, or is that because M$ lost interest? What about the office compatibility? I mean Microsoft should feel embarresed to say the least that Palm OS based devices can handle documents better than their own OS based devices!

Ed Hansberry

11-21-2002, 01:33 PM

Man these threads are always so funny :lol:

my personal thoughts on this?
I for one would've put my money on the PocketPC in a heartbeat when you would have asked like say a year ago... At the moment I'm not so sure anymore... I see SERIOUS lack in developement on the PocketPC side both on the Hardware as well on the OS side. I still can't believe the resolution on a PocketPC (or CE Handheld for that matter) hasn't changed anything for the last 3 yrs (and I'm saying 3yrs to be on the save side since it must actually be longer). I can't believe that we still are working on a platform based on WinCE 3.0 while all M$ preaches is .NET. Is that because we skip a version and we will get WinCE 5.0 with the next pocketpc version, or is that because M$ lost interest? What about the office compatibility? I mean Microsoft should feel embarresed to say the least that Palm OS based devices can handle documents better than their own OS based devices!
These posts are always humorous. :wink: How do you know what MS is working on? They have a good track record of releasing a new PDA every 18 months or so for the past 4 iterations. If that holds true, that means early-mid 2003 there would be something new. Since the MS mobile device group still has employees and many are developers, I must conclude they are working on something and not just sitting around belting out EUUs. Just because MS doesn't release press releases every few weeks like Palm does doesn't mean MS isn't busy on a newer Pocket PC OS.