Rumorville
17 May, 2004
Okay, first, announcement time. As those that noticed that there was no column last week have discovered, this column is moving to a biweekly schedule. This is for two reasons. One, I've noticed that many of my column ideas recently have been rehashings for things I've already done in the four year history here. I don't think everything that needs to be said has been said, but I also think fifty-two columns a year is more hot air than we need. Global warming, doncha know.
The second reason is that, well, I don't have the time. I'm working on a new project (That Which Cannot Be Named, or TWCBN for short) involving a new way of writing, selling and distributing fiction. My writing partner and I are churning out 5,000 to 10,000 words a week each in preparation for release, and I need all the writing time I have to meet our goals. If all goes as planned, expect to see an announcement officially unveiling (and naming) TWCBN around Labor Day 2004.
Okay, administrivia over. On with the column.
These days the handheld market looks like a soap opera. Everybody is getting into everyone else's business, or at least if you believe the rumors. I think a couple of these might be true, or at least trial balloons for later activity, and I think they'll be really healthy for the industry if they're handled properly.
The first rumor on the block is that Dell might buy PalmOne. This one's been tossed around a bit, but I think there's something to it. And I think it's more than the obvious "they want PalmOne to get the Treo" angle. Yes, acquiring the hottest smartphone on the market would be a coup for Dell and it would fit very well with their current product offerings, but I think PalmOne itself is enticing for other reasons.
Currently, Dell's biggest problem with their handheld lineup is visibility. The Axim line is doing well, but not as well as it could. Let's face it, to many people, "iPAQ" and "Pocket PC" are synonyms. Buying PalmOne gives Dell what they don't have for the Axim: a pre-built network of distributors and wholesalers to get into retail chains. Handhelds are very different from Dell's core product line. Handhelds aren't built to order. In a lot of ways, they're commodities, in that they don't vary much from customer to customer. The Dell laptop you buy may spec out very different than one I buy, but if I buy an Axim X5 and you buy an Axim X5, they're identical. Buying PalmOne gives Dell the ability to use PalmOne's existing network to sell Axims head to head with HP.
Of course, it also gives them the current Treo, Zire and Tungsten lines. I expect Dell to not only keep these lines going, but aggressively expand them. Dell isn't married to Microsoft, and there's nothing to stop them from offering handhelds in both Windows Mobile and PalmOS flavors. If anything, buying PalmOne gives them a much stronger sub-brand than they'd have if they merely licensed PalmOS for their own designs. They're in the position to sell both "Dell Axims" and "Dell Palms" to retail customers. You can't buy that kind of brand recognition. Or maybe you can.
Dell better move quick, but another rumor floating around out there has HP to license PalmOS. I also think this one has meat to it. HP is doing well with Windows Mobile, but again there's no reason why they should be faithful to Microsoft and not offer PalmOS as well. PalmSource has been aggressive about attracting new vendors since becoming their own company, and a heavy hitter like HP would be just the thing to keep the PalmOS platform healthy and diverse, not to mention strong incentive for PalmOne (or Dell) to keep innovating.
Why wouldn't they keep innovating? Well, because while Dell and HP are expanding their product offerings, other players are dropping out.
Toshiba is already gone, at least here in the US. While they will continue to develop their e800 series in Europe, Toshiba US is out of the handheld business. The official reason is that they need the LCD glass for higher priced, higher margin items like laptops and LCD televisions. While there's some truth to that, I think it's also due to the fact that they never managed to make a serious dent in HP's iPAQ sales.
ViewSonic has ended their handheld experiment as well, and I think the LCD excuse probably is the reason for them. The ViewSonic V series never really caught on, and they have better things to do with LCD glass. If they had come up with more innovative designs it might have changed things, but they bet the farm on having a "thin and light" monopoly that HP took away early on with the iPAQ 1900 series..
The big surprise exit, and I'm not 100% sure on this, will be Sony. Word on the street is that Sony isn't making money on their Clié line, and they'll quietly phase them out in favor of smaller, lighter and hopefully cheaper Vaios. Let's face it, the high end models in the Clié line cost as much as economy laptops anyway, and as much as I love PalmOS, Windows XP does do more.
Big picture, what does all this do to the handheld industry? Well, as Steve Bush commented recently on Brighthand, it narrows the field to two major players, HP and Dell. Both will offer both Windows Mobile and PalmOS offerings (it'll be interesting to see who's the first to offer a dual boot between WM 2003 SE and PalmOS Cobalt) and should have models running the full spectrum from light entry level to laptop replacements. Dell will be positioned to be a major player in the cell phone market, a major money maker for a company that knows how to make money. While HP and Dell will own most of the market, there will be plenty of room in the single digit percentages for niche players like AlphaSmart, Samsung, TapWave and others. I see this as good for the industry and good for consumers.
Of course, they're just rumors. I could be wrong about all of this.
Jeff Kirvin
Jeff@writingonyourpalm.net
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