Palm's Creativity vs. Windows' Compatibility

Consumers looking for innovative products will be happier in Palmland

The Tapwave zodiac sure doesn't look like a descendent of the PalmPilot. It was designed from the ground up as a handheld game console, with a big horizontal screen and a miniature thumb-operated joystick. It is, however, the most extreme example of the growing diversity of products, ranging from navigation systems to rugged laptop replacements for schools, that are based on Palm software.

While Palms are evolving into new and intriguing shapes, handhelds using rival Microsoft's (MSFT ) Pocket PC software seem stuck in a rut. There are dozens of strikingly similar Pocket PCs that basically come in two flavors: those that double as phones and those that don't. The result is that consumers looking for the most innovative products are going to find a lot more to choose from in the world of Palms. For example, the first Pocket PCs with built-in keyboards are just starting to appear -- two years later than in Palm-based products.

These differences reflect divergent strategies on the part of Microsoft and PalmSource (PSRC ), the newly created software arm of the former Palm. PalmSource wants to spread its software widely while limiting direct competition among licensees. So palmOne (PLMO ) (the product of the merger of Palm's hardware unit with Handspring) is aimed at the core organizer market, with its businesslike Tungstens, consumer-oriented Zires, and the Treo 600 phone. Sony (SNE ), a part owner of PalmSource, offers a Clié model that looks like a tiny laptop. AlphaSmart's Dana includes a full-size keyboard and word-processing software for schools, while Garmin sells a unit with an integrated global-positioning-system receiver and built-in mapping for use with the address book and calendar.

THERE'S A DOWNSIDE to all this creativity in Palmland. A game created for the zodiac won't run on any other product, in part because Tapwave uses a unique, PC-like video adapter to get maximum performance in action games. Garmin modified the operating system itself, a step Microsoft would never allow, to get better GPS performance. "It's slightly chaotic in the short run," says PalmSource CEO David Nagel. But, he adds, everyone benefits when individual licensees' improvements are rolled into the next version of the PalmSource software.

Microsoft's goal is uniformity. One secret of the company's success has been making sure that, on PCs, Windows was Windows -- wherever you found it. Through the requirements it imposed on products that wanted to carry the Windows logo, Microsoft created a standard environment in which the odds were very good that any piece of Windows software, whether from Microsoft or a third party, would run on any Windows computer. To ensure similar uniformity among Pocket PCs, Microsoft has imposed strict controls on their design, from the processors used to the size and shape of the display. One benefit is cheap, commoditized hardware -- Pocket PCs such as the $229 Dell Axim X3, can be great values.

This approach is spot-on for Microsoft's most important customers: corporate technology managers. Although most handhelds are still bought by individuals, Microsoft looks forward to big enterprises purchasing thousands of units. That's when corporations will build applications that work on all Pocket PC devices, no matter what brand. "Palm has created some fragmentation of their platform for developers," says Andy Haon, Microsoft's group product manager for mobile devices. "It's very important for us to maintain compatibility."

Compatibility is a good thing, but it can come at the price of dull conformity. Microsoft's strategy makes a lot of business sense, but I hope that, for the sake of consumer choice, PalmSource and its licensees can keep the experiments coming.

By Stephen H. Wildstrom

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