Pacific Connection(英語)

The "Palm Economy" versus Widows CE

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Two Strategies of Portable Computing are Put to the Test

In 1996, the moribund product category known as personal digital assistant, or PDA, sprang back to life. The resurrection was performed by inventor Jeff Hawkins and his marketing whiz partner, Donna Dubinsky. When their company, Palm Computing, Inc., launched its first two models, the Pilot 1000 and Pilot 5000, conventional wisdom had already dismissed the idea as hopeless: a burdensome technology in pursuit of an almost non-existent market. Back then, a San Francisco Chronicle report called palm devices a high-stakes gamble in a market where consumers have been saying "no" for the past five years. "Frustrated with the clumsy handwriting recognition and unfamiliar software on palmtop computers, consumers have shied away from the pricey devices." Handwriting recognition was indeed the biggest barrier to success. Because these devices are too small for a keyboard, they must translate a person's idiosyncratic written scrawl into ASCII. None did it well.

Palm succeeded where others failed by following the words of the American philosopher Henry David Thoreau-"simplify, simplify." (In truth, even if Thoreau lived to see the Palm Pilot, he wouldn't have been caught dead with it). Instead of trying to replicate a laptop in a palm-size device, Hawkins pared the whole concept down about as far as it could go. His criteria was a device so small it could fit in a front shirt of a pocket. At one time, he even carried a small block of wood that size to see how it would travel in the field. As for handwriting recognition, Hawkins concluded that the user, not the device, would have to adopt. And so he invented a simplified character set, dubbed "Graffiti," in which, for example, the letter 'A' is represented by an inverted V. While Graffiti is at first awkward to use, some devotees of the form can write as quickly into their palmtop as they can on a piece of paper, though, as one Graffiti master told me, "it wreaks hell on your regular handwriting."

The early success of the Palm Pilot could be seen almost instantly in the Silicon Valley by the same product managers and engineers who were clipping ever-shrinking cell phones to their belts. For them, the palmtop was a kind of adjunct brain, a keeper of vital statistics like your anniversary date ("buy flowers!"), your bosses cell phone number ("call only in an emergency!), and the grocery list ("take-out Chinese food and a carton of beer"). But if the geeks were the early adaptors, they are now in good company. According to the research firm International Data Corporation (IDC), handheld computers will grow from about three million units in 1997 to 13 million by 2001. Palm Computing sells its products in more than 35 countries and, according to IDC, holds a 72 percent share of the market-with the remainder held by Microsoft and its Windows CE operating system.

Following in Apple's footsteps?

The competition with Microsoft against a much smaller player has given the PDA market more than a passing resemblance to the David-and-Goliath personal computer market, with Palm Computing taking on Apple's role. While the analogy is not exact, the number of similarities is surprising. To start with, Hawkins and Dubinsky have left the company they founded to start another, somewhat like Steve Jobs did with Next. But unlike Jobs, the pair had already sold their company-to U.S. Robotics, which in turn, was sold to 3Com. Perhaps they wanted to try their hand again at entrepreneurship.

Like Apple, the Palm Pilot began life as a proprietary operating system on a proprietary platform. Meanwhile, Windows CE was licensed to all comers, following Microsoft's successful OEM model. Like Apple, Palm has, perhaps reluctantly, created a clone market by licensing its operating system, PalmOS. Of course, Jobs reversed that strategy, but David Ushijima, Palm Computing's manager of platform development for Japan and Asia Pacific, says that Palm has gotten well beyond the point where Apple bailed. "Apple hesitated at the point where they started licensing. We already have licensees that are successful in the marketplace." One of Palm's first licensees is a company called Handspring, the company founded by none other than Hawkins and Dubinsky. The duo's first product, Visor, is a palmtop with an expansion slot and a lower cost. Is Handspring competing with Palm, or is it an ally, a player in what Palm now calls the Palm Economy? As my wife would put it, the answer is yes.

And, like Apple once did, Palm is moving its focus from individuals to corporate sales. Until now, employees, not companies, have been the driving force in bringing Palmtops into the company. Users have "smuggled" them into the workplace much the way they once brought in PCs-under the IT department's radar and away from their control. Palm would like to change that model, or at least add to it. Why sell one Palm at a time when, if you can persuade a Fortune 500 company, you could sell hundreds with but a single signature on the contract.

The business plan makes sense, but it still could be tough going. As Stephanie Miles, a reporter for CNET News.com noted, the strategy is "a big gamble, but neither [Palm president Alan] Kessler nor other executives addressed the company's challenges in the new market, namely: how will Palm convince corporations to invest the time and expense of purchasing and deploying handheld devices and their backend counterparts." The problem, she said, is worsened by a plan to spin Palm off from 3Com into a publicly traded company. The IPO is due early in the year 2000 and 3Com itself says it will be a licensee of Palm's technology. But with its networking expertise, 3Com would seem better equipped to deal with large corporations than is Palm Computing, whose chief strength is in the retail channel.

David Ushijima disagrees. "Palm has its own sales force, and all the successes we've had to date in the enterprise market have been because of Palm's direct sales force. We don't share sales with the 3Com corporate sales staff. So there will be no change after we spin off-we'll continue to have our own sales force, and grow it."

In any case, Palm is certainly making a run at corporate purchasers as evidenced by announcements made at last October's PalmSource show in Santa Clara, California-a conference dedicated to the platform. Most notable was its Palm HotSynch Server product, which Palm sells under an OEM agreement from Riverbed Technologies. According to Palm, the software concurrently synchronizes hundreds of Palm Computing platform-based handhelds, or other handheld products, with an enterprise server. The software also supports POP3/IMAP4 based e-mail applications, supporting up to 2000 registered users.

Equally important to the strategy is the development work by several database companies, including Oracle, Peoplesoft and Sybase, who have created client-side applications that enable a palmtop to download data from a database server. "A sales force would be able to get inventory information or sales pricing information-pretty much anything that you can get on a corporate database," says Ushijima. "Such server connectivity has been the key to developing corporate applications for the Palm platform." The challenge is in finding niches where a palmtop is preferable to a laptop. "For example, if you are going out to a meeting, you don't often want to boot up a laptop, and take the time to load up the application. Instead, you simply pull the Palm device out of your pocket and it's instantly available."

Palm and Nokia

Palm has also been active on the wireless front. Its Palm VII has earned favorable early reviews here. (The company is now running a televison advertisement in which a woman, clearly smitten, "beams" her telephone number from her Palm VII to that of a man sitting in an adjacent train.) And Nokia and Palm Computing have entered into a licensing agreement to create what it called a "new pen-based product category." The deal calls for Nokia to license PalmOS to create a hybrid system that supports both Palm applications as well as those written under Symbian. Symbian is a joint multi-national venture between Nokia, Matsushita, Motorola, Psion and Ericsson, that all use Psion's EPOC operating system. The move would appear to be not only a hedging of bets by Nokia over which class of handheld device will take off, but a ringing endorsement of the Palm platform. Consultant Andy Seybold told the Wall Street Journal he thought that the EPOC, a more complex operating system, might be best suited for high-end mobile telephones, while the Palm operating system might be targeted at mid-range phones.

Nokia already produces handsets with keyboard-like interfaces. The agreement will now let them move to pen-based inputs in a device that combines wireless communications and voice telephony. In the deal, Nokia will contribute wireless voice and telephony applications as well as data protocols and IP-based wireless access to enterprise applications. Nokia is also involved in a few other initiatives, including WAP (wireless application protocol) and Bluetooth.

The challenger: Windows CE

The palmtop market is one of the few places in the computer industry where Microsoft has not triumphed. While Windows CE devices have much, if not all, of the same functionality as the palmtop, market share for the lightweight version of Windows has remained constant at about 25 percent. One company, Philips, announced in October it would sell off its remaining inventory of Nino CE palmtops and concentrate instead on wireless devices. But Mike Bercow, vice president of the Palm Platform, admits that Microsoft doesn't have to triumph everywhere to be dangerous. "Microsoft doesn't have to get it all right. They only have to get it right enough because of their dominance in the desktop operating system world," he said in a CNET interview.

In some ways, Windows CE has gotten a bad rap in the U.S. because people perceive it as Window squeezed into a smaller machine. "The only thing that Windows CE and Windows share is the look," says Brian Shafer, marketing manager of Microsoft's Productivity Appliances Division. "Windows CE was written from the ground up for devices, with devices in mind. Our competition, and people who like to beat us up, regularly incorrectly state that we are taking Windows 95 and shoving it down into a small box. That's not the case."

Shafer argues that Microsoft's OEM model-in which the OS is openly licensed to all comers-has resulted in more innovation. For example, CE device manufacturers like Casio and Hewlett Packard have long offered color screens, while Palm is hoping to introduce its first color models in the first half of 2000. Microsoft has also beaten Palm to the Japanese market with a fully localized version of all its CE products.

Indeed, Japan, rather than the United States, seems like CE's spiritual home. "The palm-size PC represents a very competitive environment in Japan," says Shafer. "Japan has all sorts of unique applications written for that market, with many suppliers who aren't represented in the United States. In a lot of ways, Japan is ahead of us in terms of variety and use." He calls Japan's CE-based car navigation systems "stunning," going well beyond anything that has appeared here. "You don't see just a moving map, but actual animation. That is moving down to the palm size arena where you have a GPS receiver attached to the device and you are walking around."

Japan has also proven a stronger market for so-called handheld computers: CE-class devices packaged in larger form factors, complete with keyboard, that compete against laptops. These machines offer stripped down versions of Microsoft Office applications, all residing in ROM. Without the need for disk storage, handhelds are lighter and less expensive than laptops. These larger-than-palmtop devices best represent the differences between Palm's and Microsoft's approach. Shafer dismisses Palm as optimizing for "the smallest form factor, smallest amount of battery usage, and the most simplistic scenario-taking an electronic organizer and giving it some additional capability programmatically."

Palm's Ushijima makes no apologies for Palm Computing's single-minded focus on the palmtop market. "That's what we do best." He argues that Palm's APIs and user interface are easier to use because they are designed specifically for a simple handheld device. "Windows CE tends to be a lot like Windows. To get an action done, you have to go through a series of menus, generally two or three clicks to get a simple action done. Whereas on a Palm device, you just press one button or one click and you have the application open and you can enter the information directly. If you count the number of strokes that it takes to get something done, you'll find that it's much fewer on a Palm device."

Shafer says that CE fits a broader class of hardware because of its componentized architecture: a small kernel surrounded by a set of building-block functions, which in effect, makes CE a family of related operating systems presenting users with a similar look and feel. Typically vendors pick and choose the compents they want and work with Microsoft to produce more specialized components. Developers typically write in either C++ or Visual Basic, depending on their expertise and, in the case of ported software, on the original code.

Shafer admits CE is a more complex model, but that's the price of flexibility. "We've optimized to produce a multi-functional platform and add in the capabilities of a larger, high-resolution screen, as well as color, plus audio capability and expandability. We've come at it from a completely different angle. So on the one hand they beat us up for not being as simple, but I would suggest that they are more simplistic in their execution. We're not producing a calculator. We're producing a multi-functional device."

These days, of course, the Palm platform is much more than simply a calculator. What remains to be seen here in the U.S. is whether a palm-sized device can deliver all the functionality American users ultimately will want. Will they demand, for example, a full Web browser rather than one that requires content to be reformatted. Or will they continue to leave that to their laptops? Perhaps, as laptops continue to shrink, the market for larger CE devices will disappear. Or perhaps, a new CE device will emerge from Microsoft's brewing caldron of OEM researchers that will take over the world. One thing's for certain: the demand for pocket-sized computing power has become a booming market on both sides of the Pacific.

Sidebar: David Ushijima on Palm Computing in Japan

David Ushijima, Palm Computing's manager of platform development for Japan and Asia Pacific, has gotten around. Growing up in the U.S., he lived in Japan from 1989 to 1995, where he was president and publisher of MacWorld Japan and co-launched the MacWorld Expo in Tokyo. After returning home in 1995, he launched an Internet publishing business for IDG Books Online, and launched a series of books with Yahoo! in 1995-96. He's been with Palm Computing for about a year. Shortly after we spoke, the company held its first PalmSource Tokyo Summit, which opened November 1 at the Hotel Nikko in Daiba, Tokyo.

How new are you to the Japanese market?
The first entry into the Japan market was a Japanese language product, in February 1999. That's when we created the Japanese version of the PalmOS. It shipped in March. Our arrangement in Japan is with IBM Japan, so the product appears as the IBM WorkPad.
It's not Palm branded at all?
Currently, no.
Where is development in Japan headed?
The story is very interesting. Before, when we only had the English version of the PalmOS, there were a number of developers who, on their own, created a Japanese language overlay. A Mr. Tatsushi Yamada created a product called JOS, which allows Japanese developers to start creating their own applications in Japanese. Once he created that, it was like a grass roots movement amongst Japanese programmers to start creating applications. And with our Japanese OS, there is a huge groundswell of programmer interest to create new applications for Palm devices.
Is the difference of overhead in that you are eliminating his middleware?
Yes. The performance is better. His software is based on a hack, really, intercepting calls that go to Graffiti. But ours is actually going directly to the APIs of the operating system. So obviously the performance is better, and programming is easier.
Have you seen different sorts of development in Japan than from the U.S.?
Some of the applications are unique to Japan. For example, one of the popular consumer applications is a train map. Communications is another big category, where Japan communications is probably a little more intensive than it is here in the U.S. While we don't have a version of the wireless Palm VII in the Japanese market, there's an adapter, made by a company called I/O Data, which allows you to attach a Palm device to a Japanese cell phone-either PHS and PDC standard.
Do you expect that that kind of device will disappear as you start to do more deals, as you've done with Nokia?
Possibly. But I think there will always be a market for attaching the Palm device to an existing cellphone.
What kinds of developer tools are you providing?
We just recently released version 6 of our Code Warrior programming environment. That includes the software development kit for the Japanese language developers. Among the components is a tool called Constructor, which allows you to build a Japanese user interface. And we include a set of libraries that allow you to call the APIs that give you Japanese language capability.
Are people mostly working in C?
Yes, Code Warrior is a C and C++-based. For enterprise-type developers and other non-C programmers, we recommend using Satellite Forms from a company called Puma Technology. Satellite Forms is a forms-based development tool similar to Visual Basic, but it's very forms based so you don't need to know any programming languages in order to create an application.

著者プロフィール

Bart Eisenberg

Bart Eisenberg's articles on the trends and technologies of the American computer industry have appeared in Gijutsu-Hyoron publications since the late 1980s. He has covered and consulted for both startups and the major corporations that make up the Silicon Valley. A native of Los Angeles and a self-confessed gadget freak, he lives with his wife Susan in Marin County, north of San Francisco. When not there, he can sometimes be found hiking with a GPS in the Sierra, traveling in India, driving his Toyota subcompact down the California coast, or on the streets of New York and Tokyo.

(上記,プロフィール訳)

1980年代後半より,『Software Design』や『Web Site Expert』などの雑誌に,アメリカのコンピュータ業界のトレンドと技術に関するレポートを執筆しています。シリコンバレーで,スタートアップ企業から大企業まで幅広い分野でコンサルタントを務めました。

ロサンゼルス生まれで,自称ガジェットフリークです.現在,妻のSusanとともに,サンフランシスコ北部のMarin County在住。また,SierraのGPSを携えてハイキングしたり,インドを旅したり,カリフォルニア海岸をドライブしたり,NYや東京の街中を歩いたりしています。

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