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This site is no longer maintained.
My current weblog.
Wednesday, October 09, 2002Over on the Interesting People mailing list, James H. Morris has suggested some solutions to the chip glut:
Edible chips? The silicon chip needs to adopt the economic model of its lowly cousin the potato chip. Supermarket aisles could be filled with nourishing smart chips. They could even serve useful medical purposes after being ingested, monitoring intestinal conditions or blocking fat digestion.
The upcoming line of inexpensive color Pocket PCs are going to shake up Palm OS market.
At the low-end of the B&W Palm OS spectrum, Palm has just come out with the $99 Zire. It is a physically attractive device with 2MB RAM, rechargeable battery, and no backlighting. What's interesting to me is that Palm already had a $99 device, the m105, with a backlight and 8MB RAM but no rechargeable cell. You would expect these models to be primarily impulse-buys from first-timers. Pocket PCs don't compete in this space, and that's a great thing for Palm because they need to get first-time buyers hooked on Palm OS if they are going to continue selling higher-priced models.
Palm's $149 m125 adds an SD slot, Handspring has two models at that price-point, Sony has one, and all three also have $199 B&W models. I want to proclaim all of these models at being dead, because color devices ought to decimate B&W sales when the price difference is negligible... Except that Dell doesn't have any retail presence, which makes me doubt that HP's upcoming low-end model will come in under $299. In that case, I expect the $199 models to fall to $149 and the current $149 models to disappear.
The cheapest color Palm is the $249 m130, a model that has been compromised by a faux 16-bit display. Next up at $299 are the Handspring Treo 90 and Sony PEG-SJ30 CLIE. These devices may survive, primarily selling to existing Palm OS users. First-time PDA buyers will go elsewhere. Palm's $349 m515 is a goner. Sony's wisest play might be to kill everything except the NR-series, reducing prices by $100 to make them more competitive against $250-$350 devices.
Upcoming Palm OS v5 devices are the wild card. Sony has started taking pre-orders on the $599 NX70V and $499 NX60. Both are 200MHz, 16MB devices of the keyboard/swivel-LCD variety, with the usual high-end Sony features, "soft" Graffiti area, and a CF slot. The pricier model has a VGA-resolution camera. So long as Pocket PC vendors aren't cloning Sony's features, or otherwise innovating, these models have a shot at long-term survival.
Palm is due to announce the Tungsten T later this month. Supposedly it is a 175MHz, 16MB device with "classic" Graffiti area and an SD slot. It might include Bluetooth and will probably sell for $499. With those specs it is dead in the womb.
Supposedly Palm continues to work on splitting into OS and hardware companies. Palm needs to do something. Palm built and maintained a thriving PDA business by creating products that were Good Enough for $299 or less, while everyone else's products were more expensive, difficult to use, or both.
Those days are officially over.
Pocket PCs have been Good Enough for a while, and next month's PPC devices will be cheap enough. If Palm and their licensees fail to produce competitive products in the $200-$400 range, Palm is dead. Growth at the low-end won't help Palm if those users have nothing in the mid-range to upgrade to.
ZDNet previews the Viewsonic V35 [via Pocket PC Thoughts]. Previous reports had called it a 32MB device, but this review says 64MB. If Viewsonic can do a 300MHz / 64MB device for $299, Dell's rumoured pricing becomes quite credible.
