Microsoft and the vicious Palm circle

Last week, I wrote a news story about how Microsoft's Pocket PC team invited select members of the Palm community to the Microsoft campus in Redmond, Wash., last month to try out Pocket PC devices. That story has drummed up more controversy than Roger Clemens with a broken bat. Reader reaction has been overwhelming -- with TalkBack comments offering spite, praise and everything in between.

The intent of the story was to demonstrate the degree to which competitors in the PDA market are willing to go to push their platforms and the devices that support those platforms.

And the competition has indeed been fierce. PDAs are so popular right now that demand is outstripping supply. And when you think about the potential for this market -- IDC sees it growing to nearly $4 billion by 2002 -- it's easy to see why more and more companies are jumping in and why competition is so fierce. Just in the last few months, consumer electronics giant Sony, upstart Handspring and even chip maker S3 have brought PDAs to market.

In this crowded, red-hot market, the difficult part for anyone isn't just coming out with the best product, but also getting enough attention. Some tried-and-true techniques include seeding the market and creating a buzz among early adopters and opinion leaders -- hence Microsoft's "Pocket PC Wireless and Beyond" event in mid-September.

More than one attendee said the event was a tremendous effort on Microsoft's part to show that it's committed to the platform. Some even wished that Palm would take similar steps to listen to its customers. One attendee felt Palm's listening skills were falling by the wayside. Palm is sitting on a comfortable 85 percent of the PDA market, according to NPD Intelect, so it's easy to understand why the company may be resting on its laurels. But, as the folks at Netscape can attest, kicking back allows competitors to catch up.

And don't look now, but Microsoft may be gaining. A point that a lot of people may be missing is that Pocket PC may already have the lead not in market share, but in features. Many of the features that Palm says it plans to incorporate, such as color displays, multimedia features, expansion capabilities and wireless options, are already in Pocket PC devices. Click for more.

A follow-up column by my colleague Matthew Rothenberg drew even more reader responses. Some of the more interesting observations:

A number of the attendees who wrote in stuck up for the Microsoft event, but not necessarily for the platform. Many said the event worked in terms of demonstrating the merits -- and faults -- of the platform, but only a few said they would switch to a Pocket PC device.

Others were impressed by the Microsoft team's willingness to take criticism, because there certainly was enough of it, regarding Pocket PC's lack of elegance and ease of use.

The market these days is all about, "What have you done for me lately?" After Windows, Office and arguably Internet Explorer, Microsoft is looking for its next big hit. The PDA arena is certainly one in which Microsoft may be able to score. And part of that drive includes seeding the market to promote Pocket PC at events such as "Pocket PC Wireless and Beyond."

If Microsoft can capitalize on the event and use what it learned from the attendees -- probably the most informed and most vicious critics in the PDA market -- it may improve on the one area where it has never been very strong: truth in marketing.