.KEYWORD ppeditorial1099
.FLYINGHEAD FROM THE EDITOR-IN-CHIEF
.TITLE Analysis of Palm and Handspring announcements
.FEATURE
.SUMMARY All the cards are now on the table. We’ve seen the Palm and Handspring announcements that should take us much of the way through the end of the year. But what does it all mean? In this important article, Editor-in-Chief David Gewirtz puts the new announcements under his analytical microscope and puts it all into perspective. If you follow Palm Computing at all, you’ll want to read this article right now.
.AUTHOR David Gewirtz
<<Yawn>>
So there’s a new, iMac-styled Palm IIIe skin. Yippee. And there have been a few price reductions. Yowzah. And Handspring, that company we all had such high hopes for, came out with a Palm IIIe clone with incompatible connections and a slot. Be still my beating heart.
<<Yawn>>
Between these announcements and the prospects of an Al Gore vs. George W. Bush presidential race, our upcoming new millenium seems about as exciting as, well, Al Gore.
Fine, so we’re not talking exciting. What do we really have here? Is there anything at all to care about? Honestly, that’s a tough call. Let’s look at Handspring first.
.H1 Handspring’s handicap
As you may recall, Handspring is the company created by Palm founders Jeff Hawkins and Donna Dubinsky after they left 3Com last year. Handspring has announced two devices, the Visor and the Visor Deluxe. Both Visor devices are very similar to the Palm III series, except each supports an add-on port called a Springboard expansion slot. The Visor (without a cradle, interestingly) starts at $149 and is, for all intents and purposes, a somewhat incompatible (more on that later) Palm IIIe clone with 2MB RAM and a Springboard slot (more on this, too, if you keep reading). The Visor (with a cradle) is $179. The Visor Deluxe, priced at $249, has 8MB RAM, and is available in a series of funky colors including orange (not as nasty as it sounds), blue, green, white, and gray.
Software for the Visors is similar to what you’d get with a typical Palm device, although Handspring describes an enhanced Date Book (a few better views and better integration), a calculator with business, statistical, and scientific functions, and a world clock. See Claire Pieterek’s review in this issue for more details.
Things begin to get somewhat interesting with the Springboard expansion slot. The downside is the Springboard interface is proprietary (or at least that’s what it looks like on first glance). Therefore, all your PCMCIA cards won’t work with this device and you’re dependent on new developments for add-on devices. The company’s press release claims available or under development modules include phones, pagers, global positioning systems, remote Internet access products, MP3 audio players, voice recorders, digital cameras, smart card readers, bar code scanners, and field data collection probes. The Springboard slot is also being used to deliver software, similar to the game cartridges of old. One such cartridge that’s apparently available at launch is Tiger Woods Golf. Handspring’s Web site lists an 8MB Springboard module (presumably, this would allow you to bring the Visor Deluxe up to 16MB), a modem module, a "backup module" (to aid in backing up Visors shipped without cradles), and the Tiger Woods game. Pricing on the modules is quite workable, with the backup module costing $39.95 and the 8MB module costing $79.95.
On the surface, the Handspring offerings are nothing to write home about. Fundamentally, they’re basically Palm III’s (even their shape is Palm III-like). Pricing is a bit less and the colors are more consumer friendly, giving them a possible edge with the rank-and-file consumer. But the inclusion of the Springboard slot with all devices opens some opportunities. For example, we expect the company to get considerable flack for selling their cheapest model without a cradle. But there are many people who can benefit from a killer organizer without having a PC (the Sharp Wizard was quite successful as a standalone device). Even so, without a way of backing up the data, there’s always a bit of risk. The Springboard backup module solves that problem and for under $200, someone who’s not a PC user can still have access to a Palm OS device.
This also sheds light on the inclusion of games and content on cartridges. Again, someone who can’t install software or isn’t prepared to download goodies from the Internet could add new software by popping in a module. And, of course, the software vendors get added protection from copying.
Handspring did lose some of its pricing advantage with the announcements on October 4. Palm’s IIIe was priced at $229 and Handspring’s Visor (with cradle) was priced at $179. Then, a few weeks before this issue went to press, Palm told us they planned to reduce the Palm IIIe to $199. Apparently, others they told were equally unimpressed, because just days before their official announcement, Palm dropped the IIIe’s price down to $179, matching the price on the Visor and eliminating any really good reason to go out and get a base-level Visor.
We also have severe concerns over Handspring’s departure from the standard Palm device cradle. Although Handspring’s standard cradle supports USB and therefore (according to Handspring) is going to allow HotSyncs to be about four times faster, no existing devices that use the Palm cradle interface can link with the Visor’s. While most modern machines come with USB, there are some support problems (we’ve seen problems with Windows NT) and if you don’t happen to have a USB connector, you’re going to need to shell out another nineteen bucks to get a non-USB cradle. So, for about $20 more than the Palm IIIe, you can have a device with the same performance and an incompatible connection.
I need to be pretty harsh on this topic. While, officially, the Palm Computing Platform is really the Palm OS and the desktop software, the reality is that the connection to the cradle is a big part of the unofficial standard. If you want to take advantage of all the add-on goodies out there, you’re going to be stuck. Now, in fairness, Palm also departed from the "standard" cradle interface with the Palm V, and this has proven to be something of a problem for them as well. Hardware manufacturers have had to tool up completely separate connectors and models of their products to support both connections. There’s no question that this added complexity and incompatibility will somewhat dilute the strong hardware aftermarket; not all vendors will support multiple formats.
Handspring promises unit availability directly from their Web site in October and as long as they can keep support, supply, and quality at the necessary levels, we think they’ve got a good start. But should you buy a Handspring device? I’d be cautious. Way back when, we bought a whole bunch of Power Computer desktop machines. Remember them? They were the market-leading darlings of the Macintosh clone makers. And when Steve Jobs came on board, he shut down a $300 million dollar competitor virtually overnight. We know that Handspring has Jeff and Donna and Ed. But do they have a source code license to the Palm OS? What are the terms of support from Palm Computing? What if Palm Computing decides that Handspring’s eating too much of their own market? I wouldn’t buy a Handspring device yet, until we get a read on quality and reliability. And then, I wouldn’t recommend buying one unless you’re comfortable living with a device that might be orphaned at any time.
.H1 Pragmatic pricing
So, now a basic Palm device is $179. And, if you do want the benefits of a "connected organizer", the basic Visor is also $179 (unless you need to pay the $19 non-USB tax). Is this exciting? Are we reaching new heights in pricing lows?
Well, no.
Back in June, PalmPilot Professionals were selling for $149. In fact, I wrote an entire editorial on the topic. See "The magic number: $149" at http://www.palmpower.com/issues/issue199906/ppeditorial0699001.html.
What we are seeing is a pricing structure for the mainstream product at $179, as opposed to "blow ’em out of inventory" prices for the PalmPilot Professional. But from a buyer’s perspective, who cares? The PalmPilot Professional provides much of what most Palm users demand. Despite what our advertisers and Palm might tell you, the bulk of Palm device users never download new software and never use anywhere near the 1MB that came with the PalmPilot Professional.
Even though the new devices come with twice the RAM and better screens for a mere $30 more, many users won’t notice much of a difference (although I’d personally spend $30 to do kind things for my eyes).
So while the new pricing isn’t a breakthrough, it’s still pretty reasonable. Unless you’ve just bought a PC.
Last week, I bought a 400Mhz Pentium CPU, with 64MB of RAM and a 6.4GB hard drive. I wrote a check for $183, including tax. Of course, I had to sign up for a few years of the arguably sub-par MSN Internet service, but I needed an ISP anyway. By contrast, with tax, the Palm IIIe would set me back $189. Hardware’s getting weird, isn’t it?
.H1 Precipitous pricing
In other announcements, Palm dropped the price of the Palm VII (that’s the wireless one) a hundred bucks, down to $499.They pulled eighty bucks off the price of the Palm V (that’s the swoopy-doopy thin one), making it $369. And they pulled seventy dollars out of the price of the Palm IIIx, making it $299.
With 4MB RAM in the Palm IIIx (priced at $299) compared to the 8MB RAM in the Visor Deluxe (priced at $249), the Palm IIIx is going to get its clock cleaned. In addition, the Palm VII and the Palm V are still unreasonably pricey. Granted, Palm’s also introduced the Palm Vx, which comes with 8MB of RAM for $449, and has more capability. But it’s still $200 more than the Visor Deluxe, just for a prettier case.
Apparently, some folks are willing to pay $200 for cool, since we’re told the Palm V has been selling quite well. Hey, if you got it, flaunt it.
And then we come to the cost of usage for the Palm VII wireless service. Palm has thankfully reduced pricing to a more acceptable level, but their prices are still high enough that you better be prepared to make very sparse use of your device or pay a measurable per-byte bill that’ll take a byte out of your wallet.
So, the pricing’s less, but it’s still more.
.H1 Palm’s springboard to spinout success
The last bit of news that struck our fancy was 3Com’s decision to spin Palm out as it’s own, separate entity. In typical corporate hypemanship, 3Com announced "3Com Announces Plan To Build Two Distinct Leadership Companies In Networking and Handheld Computing". "Leadership Companies", huh? I’ll bet that meaningless, self-aggrandizing phrase just made some executives over at 3Com rub their hands together in self-congratulatory glee.
They claim "Palm is uniquely positioned to aggressively drive a number of emerging strategic market segments including 1) handheld operating system licensing, 2) enterprise computing solutions, 3) wireline and wireless Internet services, 4) portal sites and, 5) Palm-branded devices."
If you read into this closely, there are a number of reasons why the Palm spinout makes good corporate sense. First, 3Com’s been having some problems lately. Second, Palm’s got buzz and could be positioned as a Web company (notice the key words "Internet" and "portal"). This means that, given the current run of whopping stock valuations for Internet companies, Palm could theoretically be given a truly astronomical value.
.H1 Strategic synchronicity
I can’t fault either Handspring or Palm for their current moves. Every move can be justified as nice and safe, and good for increasing shareholder value. However, as Palm device users, there’s nothing here that inspires techno-lust. There’s nothing here that makes me want to chuck my venerable, but just as useful PalmPilot Professional with 2MB Upgrade Card for something new.
And that’s perhaps the greatest shame. There’s nothing exciting enough to make the bulk of Palm’s installed base want/crave/lust after the newest product. And until that happens, well…
<<Yawn>>
.BIO
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