Palm says it's still into PDAs

Company insists personal digital assistants are still a fundamental part of its business, even as it increases focus on smartphones.

SINGAPORE--Even as personal digital assistants give way to a surging smartphone market, Palm will continue to deliver a continuum of mobile computing products, says a senior company official.

Speaking at the launch of Palm's latest Treo 750v smartphone here, Paul Blinkhorn, vice president of Palm Asia-Pacific, highlighted an upsurge in the converged devices market. Citing figures from analyst company IDC, he said the market will be worth US$54 billion worldwide by 2009, with a compound annual growth rate of 33.5 percent.

Blinkhorn said: "Clearly, that will have an impact on the PDA market, particularly at the high-end [segment] where the price points are not far off from that of converged devices."

While he agreed that the PDA market is declining, he noted that owners of the company's Zire 22 entry-level PDA will have different needs from others who have the Treo 750v smartphone.

"The classic handheld business continues to be a fundamental part of our business, which is also a base for us to build on," Blinkhorn said, adding that it is important that Palm continues to address a broad spectrum of users.

In Singapore, for instance, Palm has almost 60 percent share of the PDA market, he noted. "That provides a good installed base for whatever we do in the Singapore market."

First Windows-based UMTS Treo
The Treo 750v is Palm's first UMTS (Universal Mobile Telecommunications System) 3G smartphone based on Microsoft's Windows Mobile operating system (OS), a competing product to PalmOS, which Palm embraced last September. The move was largely seen as a tactic to land new corporate customers who are more accustomed to Microsoft products.

Palm currently has 12,000 enterprise customers worldwide, according to Blinkhorn.

Despite this, he said, Palm will continue to adopt a multi-OS approach for its products.

"We have clearly said that we are going to provide customers with choice," he noted. "What's great about the relationship with Microsoft is that we can now reach deeper into the enterprise base than we've ever had before."

"There are people who will continue to use the Palm operating system because they love it, and have deployed it," Blinkhorn added, noting that his company has in fact added PalmOS-like features to the Treo 750v. These include easier Web browsing and direct dialing from the 'Today' screen, he said.

Blinkhorn said nuggets of PalmOS features will help to differentiate Palm products from competing models made by Motorola, Dopod and others, in a highly-competitive Windows Mobile device market.

Industry experts, however, have argued that until Palm has a non-Windows product, such as one based on Linux, the company will not be able to secure a strong market position. Out of the three Treo products introduced this year, only the Treo 750p uses the PalmOS.

In July this year, Palm warned investors that delays by PalmSource to produce a next-generation PalmOS could hurt Palm's business.

Blinkhorn said: "That was a necessary cautionary message, which is a statutory requirement where you have to identify potential risks to the business."

"But, the reality is we've extended our agreement with PalmSource to enable us to deliver PalmOS-based products all the way to 2010," he said.