Quartz: The Palm-killing PDA?

With the unveiling of the Symbian consortium's Quartz devices at the CeBIT computer show in Germany this week, analysts say current handheld devices, such as the Palm, face competition from a new breed of integrated handheld device that packs telephony, streaming multimedia, Web browsing and Palm-like computing.

By Christmas, European cell-phone subscribers should be able to upgrade this year's digital handset to a Quartz "communicator," giving them the full functionality of a Palm organizer or handheld Windows CE device at no extra cost.

In the United States, meanwhile, Symbian CEO Colly Myers confirmed the consortium has held discussions with America Online Inc. (aol), and these are likely to continue. AOL has touted an "AOL Anywhere" access device but has yet to publicly decide on a platform.

Symbian's color devices, featuring a 320-by-240-pixel "quarter VGA" screen, provide enough horsepower for multimedia playback, supporting MPEG, MP3 and videoconferencing. The devices double as a conventional cell phone by plugging in a headset -- or wirelessly using a Bluetooth headset or ear clip. Bluetooth will even allow the device to be left in a jacket pocket or briefcase, with voice activation triggering the call.

"If I was Palm I would be beside myself with panic," said IDC analyst Jill House. "In Europe, where there's a good wireless infrastructure, the competition is pretty much over."

Symbian -- whose shareholders include handset giants Nokia (NOK.A), Ericsson (ERICY), Matsushita (Panasonic) and Motorola (mot) -- has modeled the Quartz interface closely on Palm's operating system. The reference design, or DFRD, calls for an upright tablet-style device with two or four buttons. Like the Palm, there is no built-in file manager, and a simple, task-based applications screen.

But the deathblow for today's PDA manufacturers may be the price: zero.

After demonstrating an interactive route-finding application on Quartz at the Symbian Developer Conference last week, Ericsson executives indicated that the device would be sold much like today's cellular handsets: through subsidized contracts with carriers. Today's phones sell for upward of $350 retail, but the vast majority of subscribers instead pay a modest monthly rental.

And the low cost is expected to see "smart" phones and communicators take a slice of the cellular market predicted for 2003.

"Even if only a tenth of devices are data-enabled units, that is a hundred million WIDs -- (today) Palm's doing quite well at 2 to 3 million," said Symbian's Myers.

Speaking to ZDNet News, Myers denied similarities between the Palm and Quartz platforms. "The devil's in the detail: On the face of it, Palm-size PCs look like Palm, too, but they aren't being successful," he said. "Unlike Palm, we're running Java, and our true voice integration makes it quite a different product."

But there's more to the PDA than just the device, according to IDC's House.

In the United States, where roaming between networks is expensive and coverage is patchy, and where no single air-interface standard rules, House said PDAs such as the Palm have a fighting chance.

"The U.S. is going to be harder for Symbian. The infrastructure just isn't set up to handle that kind of solution," she said. "It needs a buy-in from the carriers, and, unlike Europe, carriers are much more interested in having their own play."

In addition, users who've recently bought into Palm may be loyal while the devices remain useful: "People won't ditch what they already own," she said.