Editorial: Why the Palm OS Is the Inevitable Winner

Former PIC News Editor Ed Hardy takes a look at the competition between the Palm OS and the Pocket PC OS. Though long only a niche player in the handheld market, recently the Pocket PC started to make some gains. With the release of Palm OS 5, the competitive landscape has shifted back in the Palm OS's favor. The change to faster processor and the addition of new capabilities means that the Palm OS is in no danger of losing its lead in the handheld market.

Since its release back in 1996, the Palm OS has dominated handheld sales. When Microsoft released Windows CE in 1997, many industry "experts" were quick to say that the software giant would quickly take over the lead. As we all know, that didn't happen. Here's why.

Palm and Microsoft have taken totally different approaches to developing a handheld OS. The reason the Palm OS leads and Microsoft follows is Palm's approach worked and Microsoft's didn't.

Microsoft decided to build everything they thought a customer would ever want into theirs right from the beginning. They were aware the hardware wasn't good enough to handle all that but Microsoft knew it would be someday. They have never had a problem releasing products that weren't ready for the market and making their customers pay for the R&D. That's why WinCE/PPC have always had a lot of multimedia functions and short battery lives and poor performance; the software was way ahead of the hardware.

This might have worked if the hardware had caught up to the software relatively quickly. But it didn't. WinCE was released in 1997 and the hardware is just now catching up, five years later. The situation got so bad for Microsoft that they changed the name of their handheld operating system from WinCE to Pocket PC in an attempt to escape the very bad reputation WinCE had collected.

Palm took the exact opposite approach. It tailored its OS to what the hardware could handle. That's why the Palm OS has lacked multimedia but had great performance and battery life. Turns out that's what customers wanted and Palm has continued to dominate handheld sales.

Palm's approach meant that handhelds didn't do everything that some customers wanted, but what it did do, it did well. And Palm's simplistic approach also kept costs down.

The Times They Are a Changin'
But things have progressed. Just because the time wasn't right for multimedia in 1996 doesn't mean it still isn't right. Processors have gotten better. They use less power while getting faster. This means the hardware is ready for multimedia and that's why PalmSource is including it in OS 5.

But the Pocket PC OS benefits from the new processors, too. The hardware has finally just about caught up with their software. This is why it has made some recent gains in market share.

There might have even been a real competition between it and the Palm OS but now that the PPC's most glaring problems have been removed, its many other problems have become more obvious.

The Palm OS has a very easy to use interface, well adapted to a small screen. Pocket PC has an interface designed for a screen at least four times bigger than any possible on a handheld. And this is something that Microsoft will never be able to fix because it is absolutely dedicated to the belief that the Windows interface is the best possible one for any situation. It's right there in the name; to Microsoft, it's a PC that fits in your pocket. Actions which are easy to perform on a large PC screen are difficult on a 320 by 240 one. One of the major premises of the operating system just doesn't work.

Now that OS 5 allows new multimedia features, H-P, Toshiba, and the rest no longer have anything to advertise. With the new operating system, Palms will be able to do everything Pocket PC's can do. Multimedia, wireless, whatever. Both operating systems even run on the same microprocessors. What's H-P's tag line going to be, "Almost as Good and Only Twice as Big"?

There are thousands of Palm OS applications and a thriving third party software market. Hardly any companies are developing for the Pocket PC and so there are few applications. This is because developers know that if they make a successful application, Microsoft will write a clone and bundle it with PPC 2003 (or whatever).

For example, there are numerous word processors for the Palm OS. This gives customers a choice and the competition spurs the developers to keep making their products better. Microsoft bundles Pocket Word with the operating system. There is no point in anyone making a competitor. Few people will buy it because they already have a word processor. From all reports, Pocket Word is pretty lame. I've even heard suggestions that Microsoft deliberately made it that way so they wouldn't cut into sales of the desktop version. But no one will write a serious competitor because there's almost no chance they could make any money off it.

Too Little, Too Late
Microsoft has missed the boat. Palm was asleep at the wheel, just coasting along for a couple of years. This was Microsoft's only hope to take over the market. But that time is over. PalmSource is aggressively improving the Palm OS. It already has 87% of retail sales in the United States and sells about twice as many handhelds in the Enterprise market as Microsoft does. Expect PPC's share to drop back to single figures. Especially during the burst of sales caused by Palm users upgrading to the new operating system.

The PPC won't go away. Microsoft has tons of money to pour into it and hates to admit it has failed at anything. But any other company would see the writing on the wall and drop it.

There are still plenty of "experts" who are predicting that the Pocket PC will take over the lead from the Palm OS in a few years. Keep in mind, though, these are the same people who have been predicting the same thing for years. Every year, they move back the year that Microsoft will take over.

I wish I could claim all this came to me in a great epiphany but Steve Bush from Brighthand is the one who shed the light on Palm's and Microsoft's differing philosophies for me on the way home from the PalmSource conference a few months ago.

Editorial: Why the Palm OS Is the Inevitable Winner http://www.palminfocenter.com/news/3626/editorial-why-the-palm-os-is-the-inevitable-winner/

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