Not all analysts in the mobile space see the evolution of their market in exactly the same way. Carmi Levy, senior research analyst with Info-Tech Group, sees a more platform-centric convergence in the handheld space, the shape of which is not so much determined by the carriers' choices as by the flow of software that makes applications possible. "Windows Mobile-on-Palm smartphones and RIM-on-Intel processors represent the future direction of the converged handset and infrastructure market," Levy told TG Daily.
"Microsoft, RIM, and Intel, in particular, have well-established track records of delivering solutions directly to IT," Levy continued. "Although Palm's route into IT has been somewhat more circuitous, it, too, has been building credibility in the enterprise space of late. The Microsoft deal merely strengthens its position as a trusted vendor."
Treo 700w smartphone
One of the more surprising outcomes of the Windows/Palm deal is the perceived sublimation of the Palm OS. As embraced by its users as Mac OS X is by its own devoted fans, Palm OS is currently produced by PalmSource, which was spun off from its parent, Palm Computing, in October 2003, to form PalmSource. At that time, PalmSource claimed Palm OS was installed on over half of all handheld devices in production.
That same month, Palm Computing merged with the company formed by its resigned founders, Handspring, to become "palmOne," a name distinguished from "PalmSource" by its lower-case "p." The nomenclature didn't last long, as someone had to be "Palm." So both companies found themselves redefining their other halves: PalmSource by taking over China MobileSoft, a producer of cell phone software; and the newly rechristened hardware manufacturer Palm, Inc., trying to reabsorb its own offspring. But in early September, Palm's bid for PalmSource was bested by Access Co., Ltd., a Japanese producer of handheld-based Web browsers.
While this didn't leave Palm without an OS, it was expected to find another partner. Although Microsoft claimed the partnership between it and Palm took years to ripen, the timing of Palm's Treo announcement late last month answered many late-breaking industry suspicions.
Anyone who's studied the evolution of PC platforms over the past few decades knows how some platforms get orphaned, and how rarely they get rescued (CP/M, GEOS, DESQview/X, GEM, OS/2, BeOS). In Carmi Levy's book, add one name to that list. "PalmSource, which stumbled in delivering version 6, now finds itself fighting an uphill battle to convince its former owners, and the mobile/wireless market in general, that Palm OS will remain relevant in the middle of these powerful new hardware/software/carrier alliances," he told us. "Frankly, I don't see that happening. The market has already voted with its feet: Palm OS-based devices are in freefall, and the conditions are such that this trend will not be reversed.
"Palm OS as we know it is dead," Levy added. While PalmSource's announced plans to move future versions to a Linux core may conceivably help it carve out a niche in the low-end of the market, "its long-held hope of appealing to the enterprise market is now history. IT's needs are being, and will be, nicely met by the remaining players."
Dr. Gerry Purdy, principal analyst with MobileTrax, disagrees strongly. "I don't think that Palm is getting squeezed out," he told us. He believes PalmSource's move to Linux will make it "the dominant OS in the 3G [third-generation] phone market."
Disagreeing with the notion that platforms are starting to define mobile computing, Purdy added, "What happened is that the OS has become less relevant in the wireless handheld world, but value added services have become more valuable." PalmSource's acquisition of Linux supporter China MobileSoft put them right where they need to be; and Access' purchase of PalmSource was also smart, he claims, because it gives their Web browser a reach outside of Japan. With Access as Palm's Linux supplier, and PalmSource continuing to be an applications supplier - despite Microsoft - Purdy believes "you'll see Palm become a major handset manufacturer in the wireless handheld space."
That's not how Carmi Levy sees it at all. "At the end of the day, the exit of Palm OS as a contender in the enterprise market will be a good thing for IT," he told us. "It will force developers to refocus their attention on the remaining platforms that finally have the broad-based vendor support - handset, processor architecture, operating system, and carrier - required to deliver much richer applications to a mobile audience. This will also drive faster acceptance of standardized mobile development tools and processes."
Joe Wilcox, senior analyst with JupiterResearch, does not see the "Exit" door for Palm just yet. "Most of the devices that Palm ships run PalmSource software," he reminded us. "So I think it would be way, way premature to write PalmSource off here." The fact that Windows Mobile was only announced for one Treo model, Wilcox said, should denote the limitation of Microsoft's new relationship with Palm. "Yes, Palm is licensing Windows Mobile, but it's toe-in-the-water stuff. PalmSource has a whole leg in the water, at least."
However, PalmSource does have a job ahead of it, Wilcox added, in re-defining itself to a bewildered market. "It's now up to PalmSource to really articulate a clear road map for its products, and to begin delivering on some new capabilities as soon as possible."