November 17th, 2004
PalmOne's Colligan on the hot seat in Asia
In a relentless line of questioning, CNETAsia’s Aloysius Choong hangs on to PalmOne president Ed Colligan like a pit bull to get a better idea of the course that the hardware manufacturer has charted for itself amidst an onslaught from the Microsoft-based PocketPC world and a setback with China’s largest wireless carrier. Choong digs deep on the news that PalmOne is keeping its operating system options open now that its $40 million per year deal with PalmSource (the PalmOS guys) is about to expire. If a decision to switch to or add PocketPC as an option has been made, Colligan wasn’t about to spill the beans. However, he did remark on Microsoft’s power and largess — a sign that he may not be able resist gravity much longer.
The gravity I’m talking about is the one where Gartner announced last week that Microsoft has taken the lead in the handheld operating system market for the first time. According to the report, Microsoft doesn’t just have an edge. With 48 percent marketshare worldwide, Windows CE (which is at the core of PocketPC) has a commanding lead over PalmOS (which came in at 30 percent). International markets have traditionally been a weak spot for PalmOS-based devices, particularly in Europe where Symbian has enjoyed a loyal following. In discussing a significant amount of operating system engineering work that PalmOne had to do in order to make its devices marketable in China, you can almost sense how the Treo maker would rather have its operating system provider take care of all the localization issues. Just another reason Microsoft is probably looking pretty good.
It’s unlikely that PalmOne will go cold turkey on PalmSource should it decide to add PocketPC to its mix. Even so, any move by PalmOne to take on another operating system would be a devastating blow to PalmSource. In fact, it may have already been. Since the beginning of this month, when Needham & Co. issued a research report that said PalmOne had "tacitly admitted" it was going to use PocketPC in its Treos, PalmSource’s stock has dropped by over 30 percent. I’ve been hypercritical of PalmSource’s failure to fully embrace Java as its primary development platform, thereby giving the more than three million developers that work in Java guaranteed access to the PalmOS market. My commmentary drew a response from PalmSource product marketing vice president Charlie Tritschler who tried to convince me otherwise. I’m still not convinced. Now, with PalmOne on the verge of making its decision, it may be too late.
