Microsoft could find hard task winning underdeveloped PalmtopPC market

Microsoft may face quite a struggle trying to win the palmtop PC market in 1998 from its incumbents. Microsoft's PalmPC is intended to complement the existing Windows CE platform, the Handheld PC (HPC), and is aimed squarely at the current market leader, 3Com's Palm Pilot. Both units have stylus input, rather than keyboard, are designed to synchronise with a desktop PC and run a growing range of software packages

Microsoft may face quite a struggle trying to win the palmtop PC market in 1998 from its incumbents.

Microsoft’s PalmPC is intended to complement the existing Windows CE platform, the Handheld PC (HPC), and is aimed squarely at the current market leader, 3Com’s Palm Pilot. Both units have stylus input, rather than keyboard, are designed to synchronise with a desktop PC and run a growing range of software packages.

But IDC’s Graham Penn is not sure whether we’ll see an impact on the market here in New Zealand any time soon.

“It’ll be interesting to see what the uptake of the product will be. It will really only be shipping in volume for Christmas 1998.” Penn describes palmtops as “a product looking for a market” and believes we may have to wait another generation before seeing a usable product.

Interestingly, of the manufacturers that do support the PalmPC, none of the major HPC or notebook vendors are among them. Both HP and Compaq, early adopters of the HPC, have declined to be involved with the PalmPC at this time. Penn puts this down to protecting their interests.

“They see the PalmPC intruding into their existing notebook sales.

“They’re going to wait and watch and see what’s going to happen in this market but not be major players.”

3Com’s Australasian product manager for the Palm Pilot, Paul Dundas, isn’t worried by the Microsoft initiative, despite the obvious attempt to leverage the Palm Pilot’s name and market.

“We are Palm Computing, we have a product called the Palm Pilot based on the Palm Computing platform,” says Dundas, who wishes Microsoft had “a bit more inventiveness with their own product and used their own name”. His aim is to help customers avoid confusion over the two products.

Dundas believes the Palm Pilot has the dominant market share in Australia and New Zealand and doesn’t see the PalmPC as an immediate threat.

“By the time Gryphon [the PalmPC] comes out we’ll definitely be on our third generation of product.”

Microsoft claims 500,000 HPCs have shipped in the year since Windows CE was first launched, outstripping “cellphones, pagers and many other devices in their first year”, according to Bill Gates. Only 300,000 of these “shipped” devices have actually sold, however. 3Com says the Palm Pilot has sold more than a million units in two years.

IBM was so impressed by the Palm Pilot it signed a licensing agreement with 3Com and is selling it as the IBM Workpad in North America and Japan. IBM has no immediate plans to sell it in Australasia.

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