Is Palm better than Pocket PC?

Is Palm's supremacy in handhelds a reflection of the merits of the operating system? Is following the masses always the smartest option when buying PDAs?
Written by David Coursey, Contributor
commentary There used to be a TV commercial--for a patent headache medicine, as I recall--proclaiming that "four out of five doctors" agreed the advertiser's medicine was best. Since 80 percent of doctors agreed, obviously we should follow their advice. The smart thing to do, right?

That's the same logic that keeps Windows users from seriously considering the Macintosh, or Palm users from considering Pocket PC. After all, if nearly 70 percent of PDA customers buy Palm, how much of a mistake could it be?

In the same way that I refrain from telling Windows users not to pass up the Mac, I try not to push the Pocket PC on the Palm-toting masses. But I will note that, whether you're choosing a desktop, a PDA, or a painkiller, following the crowd isn't always best.

After years of shadow boxing, the real battle between Palm OS and Microsoft's Pocket PC operating system has now begun. Both platforms now offer mostly comparable devices at a variety of price points. Buying Palm no longer means "inexpensive," any more than choosing Pocket PC is synonymous with "pricey."

With OS 5 and the forthcoming OS 6, the Palm community has a weapon to compete head-to-head with Pocket PC. The hot Palm devices right now are the Palm Tungsten T and Sony's high-end CLIE models NX70 and NZ90. The latter includes a built-in 2-megapixel digital camera, but is priced beyond what most Pocket PCs sell for. On the Microsoft front, less expensive hardware, especially from Dell, makes PDAs running the Pocket PC OS more affordable than ever.

For the average PDA buyer, however, the default choice will still be Palm. It is, after all, what everyone else seems to be using. In most stores and online outlets, Palm-based PDAs usually greatly outnumber Pocket PC devices. If you go out shopping, the PDAs you're most likely to find will be Palm-branded devices, probably followed by a Sony Palm OS unit or two. Only then, about a dozen models deep into your PDA search, will a Pocket PC--probably an iPAQ--appear.

The best PDA applications I've seen--things like mapping, GPS, finance, games, and entertainment--all run on Pocket PC. But none have managed to become big sellers. By contrast, most people who buy PDAs seem to do little more with them than use basic, Filofax-like applications or, perhaps, download a few games to play during their commutes or in airport waiting areas. Palm, of course, has more such applications available than Pocket PC.

All those factors have translated into market dominance for Palm. During the last holiday season, Palm-branded devices were the No. 1, No. 2, No. 3, No. 4, and No. 5 best-selling PDAs, representing 230,000 units sold at retail in the U.S., according to the NPD Group.

The top selling model was the under-US$100 Palm Zire, alone representing 13 percent of total PDA sales during the final quarter of 2002. Palm says that, according to its registration data, 90 percent of new Zire users had never owned a PDA before.

Palm has a worldwide market share percentage in the high 60s, according to Alex Slawsby of IDC. Microsoft's Pocket PC share is in the high teens. The remaining share is spread among proprietary operating systems and PDAs running Linux and/or Java.

You'd think the Pocket PC would make a stronger showing. After all, Palm and former No. 2 vendor Handspring have faced major financial difficulties for several years. Earlier this week, PalmSource, which develops Palm OS, said it had laid off 18 percent of its workforce to bring its revenues and expenses into line. Incidentally, 2002 marked the first time year-to-year PDA sales dropped, reducing the overall market by 13 percent.

Microsoft, of course, faces no such economic problems. But the company has had a hard time winning acceptance for Pocket PC, which in turn seems to result in fewer available models and fewer applications. And, while Pocket PC is the best platform for corporations building their own PDA applications, few businesses have actually taken that plunge.

The focus of Pocket PC manufacturers, however, has been corporate rather than consumer sales. And as long as corporate purchasing remains depressed, the overall ratio of Pocket PC-to-Palm sales won't vary much.

To paraphrase that classic 1950s album: Can millions of Palm fans be wrong? Is a Pocket PC worth searching for?

For me, yes. My favorite PDA remains the various models of HP's iPAQ. If I were buying a device as a gift, or if my iPAQ got stolen, the new Dells look like a great buy--about half what an iPAQ might cost. (If only I didn't already own so many iPAQ peripherals.)

I used to feel pretty strongly that anyone who didn't choose Pocket PC was buying a technically inferior platform. I still think that's true. But as we've seen over the years, superior technology doesn't mean superior sales. Palms evidently provide what most people want to do with their PDAs very well. And with OS 5 and the new Tungsten processor technology, Palm has closed that technical gap. Microsoft, meanwhile, is seemingly turning its attention away from PDAs and toward smart phones.

So, for the vast majority of customers, a Palm OS device is today as good a choice as a Pocket PC, especially if all you do is run the built-in apps and sync with your desktop. Still, that doesn't mean I'm going to switch anytime soon.

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