Introduction.doc

Winning strategy for Palm – A Proposal

Management of Technology MNGT 463

Prof. Shane Greenstein

Fall 2000

Deepa Bhaskaran

Tushar Dhayagude

Rahul Kamath

Zeev Klein

Allister Lundberg

Goro Takeda

Table of Contents

1 INTRODUCTION........................................................................................................................................................1

2 INDUSTRY ANALYSIS.............................................................................................................................................2

2.1 VALUE CHAIN............................................................................................................................................................22.2 MARKET GROWTH.....................................................................................................................................................2

2.2.1 Size and Growth..............................................................................................................................................22.2.2 Market Trends.................................................................................................................................................3

2.3 CURRENT DESIGNS....................................................................................................................................................42.3.1 Palm’s Designs – Table 1................................................................................................................................42.3.2 Competitive Designs – Table 2........................................................................................................................4

2.4 COMPETITIVE LANDSCAPE IN EUROPE......................................................................................................................52.5 CURRENT REVENUE MODELS.....................................................................................................................................6

3 PRODUCT EVOLUTION..........................................................................................................................................7

3.1 MARKET PENETRATION AND DIFFUSION....................................................................................................................83.2 MASS-MARKET PREDICTIONS....................................................................................................................................8

3.2.1 Form factor......................................................................................................................................................83.2.2 Connectivity protocols (incl. Infrastructure, standards, etc.).........................................................................93.2.3 Technology platforms....................................................................................................................................103.2.4 Content and 3rd party applications................................................................................................................113.2.5 Pricing and Revenue Models.........................................................................................................................133.2.6 Accessories/Companions...............................................................................................................................13

4 STRATEGY FOR PALM.........................................................................................................................................15

4.1 PRODUCT ROADMAP................................................................................................................................................154.2 STANDARDS.............................................................................................................................................................164.3 GROWTH STRATEGIES..............................................................................................................................................16

5 BIBLIOGRAPHY......................................................................................................................................................17

1 Introduction

Paris, 2002: As a Finnish business traveler strolls along the river Seine, her streaming audio feed is

interrupted by a video call from her boss, who wants her to meet with a client on the other side of the

city. Instantly, her mobile phone displays a map and timetable of subway services to the client's

office location, and offers her the option to buy an electronic ticket or call for a cab. Meanwhile, a

visitor in New York City fumbles with a bunch of quarters in his pocket to call his voicemail at home

base. As we look beyond our own borders, a number of factors are playing into the proliferation of

the connected wireless handheld in Europe that deem further study at Palm, Inc.

The goal of this paper is to suggest a product strategy and roadmap for the smart handheld market in

Europe over the next three years to the product management group of Palm, Inc. To achieve our goal,

we analyze the present ecosystem and apply Moore’s Diffusion and Rosenberg’s Uncertainty

frameworks to identify the market and technology drivers for this product category and offer an

assessment for the product's evolution.

Before we analyze Palm’s European market, it is imperative to describe the smart handheld devices

(SHDs). In terms of the ease-of-use, cost and administrative requirements, SHDs represent attractive

alternatives to laptop computers for mobile workers. Further, the wireless internet platform will act

as a springboard for many enterprise and personal applications. SHDs have been broadly classified

into three categories: PDAs, smart phones and vertical application devices.

Personal digital assistant (PDAs) - PDAs have become synonymous with Palm devices. A PDA

is a SHD that combines Personal Information Management (PIM) utilities such as phone books,

calendars, calculators, mail management tools onto a single platform.

Smart Cellular Phones - Smart phones are the generic title for digital phones on wireless

networks that have the capability to browse the internet, send and receive faxes, SMS (Short

Messaging Services) and email. High-end smart phones like Nokia Communicator have a palmtop

and digital phone in a single unit with the ability to link seamlessly with PCs, printers and the

internet.

Vertical Application Devices - VADs are application specific SHDs typically made specifically

for a particular business such as Fedex or an industry like Airline/Aviation.

Winning Strategy for Palm – A Proposal Page 1 of 17

2 Industry Analysis

This section looks at the current ecosystem of the smart handheld market in Europe.

2.1 Value Chain

All components of the value chain are vital for

creating a mass market for the SHDs. The

technology infrastructure providers, content

providers and information appliance

manufacturers must work in unison building

blocks such as location based services, voice

portals, encryption, SMS, etc. Technology

infrastructure providers include companies

such as Nokia, Ericsson, Motorola, Lucent and

Nortel whereas content providers include Yahoo, AvantGo, Oracle Mobile, Vindigo and iobox.

2.2 Market Growth

2.2.1 Size and Growth

The European boom in the mobile wireless market is poised to explode in the near future. The

demand for SHDs is growing in leaps and bounds as well. Much of the momentum is driven by the

fact that mobile handset manufacturers are coming closer to the traditional PDA manufacturers, as

they begin offering smart phones and communicators with the combined functionality of both.


According to Robertson Stephens, on a global basis, smart phones are likely to outstrip basic and

browser enabled handsets by 2005, creating a global installed base of ~800 million devices with in

the next decade (See Figure 2). The market for SHDs in Europe has grown steadily this year and is

expected to more than triple by 2003. International Data Corp. (IDC) predicts that about 6.3 million

such devices will be shipped in Western Europe in 2003 resulting in revenues in excess of $3.7

billion (See Figure 3). This growth in Europe can be attributed to the appetite of Europeans for

communication gadgets and the effectivness of the GSM standard.

2.2.2 Market Trends

Although the smart handheld industry has exhibited steady growth in 1997 and 1998 years, 1999

proved a turbulent year for SHDs. There were several partnerships, initiatives, failures and

emergence of new technologies. In general the trend is towards convergence of the features of the

cellular phones and the personal organizers. There are six areas where there is tremendous thrust:

Increased Processing Power – Advances in microchip technology will enable speed as well as

enhance integration of these into single circuit boards.

Connectivity - Europe has built phones and palm-sized devices based on a standard

communication protocol, GSM. Manufactures are going to standardize on the much-faster GPRS,

which is the next incremental improvement based on the GSM network.

Additional Applications – More and more content providers are providing wireless connectivity

to their continent and applications using WAP, WML and other technologies.

Audio Upgrades – Audio input and output capabilities including voice and music transmission

and reception are becoming a major trend in the device convergence.

Display Upgrades – Need for larger screen space is driving the new form factors but there is a

design tradeoff between size, weight and price of the device.

Synchronization between OS platforms and devices – Growth of mobile computing is

increasing the need for data synchronization with other devices like laptops.

2.3 Current Designs

To analyze the evolution of this product category, we study the current designs prevailing in the

market.


2.3.1 Palm’s Designs – Table 1

Device List Price

Target Market Connectivity

Form Factor Applications & Accessories

Technology Platform

Palm IIIe / III xe

$149 / $249

Price conscious businesses looking for full device functionality

No 4.7" x 3.2" x 0.7"6ozLarge Screen approx. 15 lines

PIM3rd party appsMP3 playerDigital cameraDigital recorderPortable keyboard

Palm OS

Palm m100 $149 Early majority – busy consumer

No 4.66" x 3.12" x 0.72" 4.4 oz.Smaller Screen

PIM 3rd party appsClip on faceplates

Palm OS

Palm V $299 / 399

Early majority – busy professional

US Yes – but not in Europe

4.5" x 3.1" x 0.4" 4 ozLarge screen

See Palm IIIe PIMEntertainment3rd party apps

Palm OS

Palm VII / VIIx – NOT OFFERED IN EUROPE

$399 / 499

Innovators – consumers who need to be connected


5.25" x 3.25" x 0.75" 6.7 ozLarge screen

See Palm IIIe Online e-mailImessengerPIMEntertainmentM-Commerce

Palm OS

OmniSky ModemNOT OFFERED IN EUROPE

$99 & $40 / month

Clip on sled to Palm / Visor / CE

EmailWebPalm.net


2.3.2 Competitive Designs – Table 2

Device List Price

Connectivity Form Factor

Applications & Accessories

Technology Platform

Handspring - VisorVisor DeluxPlatinum (Faster)Prism (Color)

$149$249$299$449


4.8" x 3.0" x 0.7"5.4 oz

Color - 4.8" x 3.0" x 0.8"; 6.9 oz

-PIM-3rd party apps-MP3 player-Superior digital camera-Digital recorder-USB connection-GSM enabled Visorphone-Other clip-ons

Palm OS Palm OS 3.1

Psion Revo Plus

$399 Yes – but requires GSM plug-in modem

6.1 x 3.1 x .67 oz

-PIM-keyboard-SMS to phones-available in French, English, German

EPOCH GSM

RIM – Blackberry 957

$499 Yes – just entering UK, partner with BT CellNet this year

4.6 x 3.1 x .75.3 oz20 line screen!

-PIM -always connected-keyboard

Pager Pager

Nokia 7110 $200-300

Yes – GSM enabled 14.4 kbps

4.9 oz, 5-8hr. talk time

-predictive text makes easier entry-IR for sync.-some games

Nokia GSM

2.4 Competitive Landscape In Europe

Palm has competition from two categories of players in Europe – the wireless phone manufacturers

like Nokia and Ericsson, and the palm-like device makers like Psion, Handspring and RIM.

In the phone category, Nokia and Ericsson, with significant operational experience and brand

recognition in Europe, are strong competitors for Palm. Nokia introduced an WAP-enabled phone,

Nokia 7110, which failed due in part to a tiny screen size and a slow connection at 14.4kbps.

However, Nokia’s new model, Nokia 9210 Communicator, has a larger screen and works at 43.2

kbps. Nokia’s rival, Ericsson, also introduced a model with a similar design, R380, based on

Symbian’s EPOC OS. Both companies are trying to create consumer enthusiasm about smart phones

and to grab initial market share. As of now, consumers are not happy with a relatively slow


connection speed and limited availability in supporting applications. The move to the faster GPRS

standard may reduce customer uncertainty and allow for economies of scale and scope.

In the palm-sized device category, Palm is one of the lead players with competitors including

Handspring, Psion and RIM. Palm has not introduced a single connected Palm device in Europe. In

the US, Palm has the Palm VII, a PDA with wireless Internet access and the Palm Vx with either a

clip-on modem or OmniSky modem. Palm VII is slow, costly, delivers only selected Web content

and has limited email facilities. Besides, Palm VII cannot work outside the U.S. since it works only

on the BellSouth communication protocol. Palm Vx comes at a premium price and ruins the thin-

and-light form factor. As an intermediary solution, Palm is launching software in Europe that enables

users to connect their devices to the Internet using a data-enabled mobile phone, either via infrared or

a cable to the Palm. It also announced its introduction of a cell phone sled from RealVision for Palm

V and a plan to launch a clip-on GSM unit for all Palm devices in early 2001. A year ago, Palm

announced a joint development effort with Nokia to create a new penbased product that runs on both

Palm and Symbian platforms, but as yet nothing has been introduced.

In the US, Handspring has just introduced the VisorPhone, a Palm OS based PDA combined with

voice calling and wireless data capability. The Visor uses GSM and should be relatively easy to

modify for the European market. Though Palm earns license fees on Handspring sales, the majority

of Palm's profits come from selling their devices.

Psion devices, which are very popular in Europe, are currently designed to accept mobile GSM

modems and are therefore significantly ahead of Palm. Additionally, they have modified their

applications for different European languages. Psion is based on the EPOCH operating system,

which is a competing operating system to the Palm OS. Losing to Psion will result in Palm losing

both devices and license revenues.

Research in Motion (RIM) makes two-way pagers and has recently entered the palm-sized devices

market. Their devices are designed for email, and their keyboard designs allow for fast data entry.

Without significant marketing, loyal groups of connected professionals have adopted their devices


and become avid users. RIM has recently introduced their 957 wireless handhelds. This handheld is

being tested by users in the UK, thus giving RIM a lead over Palm.

2.5 Current revenue models

Palm’s current sources of revenue include device sales (Palm handhelds), Palm OS licenses (to other

Palm-based device makers like Handspring, Kyocera, Nokia, Sony, Symbol Technologies, and TRG

Products), Palm.net service plan fees and Enterprise solutions for the Palm platform. Of these, the

device sales account for 78% of revenues. As SHDs become a mature market, Palm may have to use

new revenue streams in order to capture value. Some of the other revenue models in vogue in Europe

and Japan are:

1. Revenues from Content and Interactive Service providers – Until wireless content and

information is commodified, SHD manufacturers can secure payments from mobile content

providers (as NTT DoCoMo does today). Small screens and a highly competitive market will

keep these payments high. Over time, the balance of power may shift from the device

manufacturers to the content/service providers, similar to today’s cable television networks.

2. Premium Personalized Content - Small fees for valuable, personalized, timely content may meet

with consumer acceptance, either billed directly (as in weather.com's SMS/paging-based service)

or bundled into a carrier's monthly bill (for an i-mode offering).

3. Revenues from advertising and sponsorships – Potential for advertising will expand with

location-based services. Mobile screen and navigation limitations as well as the way content is

delivered as part of a deck of related pages will also make users less likely to respond to an

advertisement on their handset.

4. Subscriptions – Providers must upgrade their infrastructure to enable providers of premium

services to garner revenues via subscription and pay-per-play models.

5. Commerce transactions - Similar to content services, commerce services that succeed will take

advantage of the context of time or mobility. Merchants can, therefore, capture ubiquitous orders

whenever or wherever a consumer's desire to purchase arises.


Scandinavia is probably one of the first markets in Europe where mobile shopping solutions have

emerged. Constraints like finite bandwidth, limited GUI, metered access costs and the lesser

computing power of the devices may slow the progress

3 Product Evolution

The above industry analysis gives us a good background to predict how the market will evolve over

the next three years. But before we provide a strategic framework for Palm, we will evaluate the

market penetration and diffusion in terms of Geoffrey Moore’s framework.

3.1 Market penetration and diffusion

We believe the smart handheld market is currently at the "early adopter" stage in Europe:

1. There is no one standard or dominant design that drives the industry.

2. Prices are relatively high for both the devices and the wireless access.

3. Applications for the devices are still evolving.

4. Competition from many players, with most of the designs still evolving.

5. Customers are primarily niche (sophisticated, tech-savvy business users).

6. Devices are too complicated for use in mass market – data entry complexity, synchronizing

capabilities, etc.

3.2 Mass-Market Predictions

Geoffrey Moore’s framework helps us predict the mass-market characteristics for SHDs, specifically

for the early majority. In conjunction, we use Rosenberg's framework to analyze uncertainties related

to those mass-market projections.

3.2.1 Form factor

Currently available WAP phones are large, clunky, unreliable and expensive. Their screens are

small, hard to read and are typically menu driven. Data entry is cumbersome and requires users to

either use keypads or pen styluses. Early adopters are more tolerant to these shortcomings that are

exhibited by rudimentary SHDs such Palm VII.


Predicted requirements for mass market

The early majority, whom Moore refers to as Pragmatists, would want features that enhance their

experience. Such features may include:

Larger screens: As richer applications are offered over handheld devices, consumers may require

larger screens, e.g., browse the internet, play games and read/send email.

Making 'em Small and sleek: As people begin to expect "anytime, anywhere" access, elegant,

small-sized, lightweight devices with long battery lives will do best.

Being Vocal: Data input mechanisms will have to be easier to use. Data entry using voice

browsers using voice recognition technologies may be preferred over keypads or stylus pens.

Uncertainties

Emergence of a dominant form factor is unclear: Customer preferences for the form factor, and

the evolution of enabling technology is uncertain. The likelihood of Palm's VII versus Nokia's

Communicator 9000 design emerging as the preferred form factor remains to be seen.

Tradeoffs have to be carefully managed to minimize costs: Larger screen sizes and longer battery

lives may warrant other considerations of space and cost. Palm should not lose sight of the big

picture in terms of controlling costs and managing device real estate.

3.2.2 Connectivity protocols (incl. Infrastructure, standards, etc.)

Currently Western Europe has the highest penetration of cellular phones in the world with GSM as

the ubiquitous standard. Palm has recently announced collaboration with Motorola to develop a cell

phone accessory that will utilize GSM technology. Although penetration is currently very high, GSM

is a first generation voice driven technology and is unsuitable for high-speed data transfers. Early

adopters are typically visionaries, in this case likely busy professionals who would find professional

applications for Internet connectivity if made available ) But GSM is not a packet switching based

technology, which is absolutely crucial for the applications that will drive the adoption in the mass

market. Initial trials are currently underway in Finland with 3G technologies, which promises

wireless access speeds that are at least as competitive as fast-wired modem connections.



So much for the visionary, but the Pragmatist values ease of use and speed of connectivity, rather

than the simple satisfaction that such connectivity exists. To the pragmatist:

Higher bandwidth wireless technology: is vital for critical applications and for bandwidth-

intensive applications like video-conferencing and music downloads, which will drive mass

market. This can be supported only if EDGE or w-CDMA is adopted by 2003.

Worldwide adoption of at least 2.5G: is important since it allows the devices to perform globally.

The Pragmatist will not be enticed to buy devices specific to one standard.

Providers must ensure that travelers can get uninterrupted service without losing data.

Uncertainties

Although migration towards higher generations is in progress, the migration path is unclear.

Currently auctions for 3G licenses in Europe have fueled negative sentiment over the ability of

the carriers to make money, which has put the industry in a slump.

In the absence of full-fledged adoption of 3G technologies, there is widespread speculation that

migration will occur from GSM to GPRS to EDGE to finally WCDMA. But none of the carriers

are taking steps in this direction.

All in all, primitive wireless technology capabilities and slow adoption of newer technologies have

been the biggest sources of uncertainty.


3.2.3 Technology platforms

Palm's Operating System (Palm OS) is currently the most widely used OS in the handheld market, in

fact more than 75% of the handhelds are based on it. But Palm does not have expertise in the

connectivity stack protocol IP that is crucial to make a smart handheld device. Palm must rely on

business partners such as Motorola and Omnisky to gain access to this technology platform.

Microsoft CE and Symbian are becoming forces to reckon with in the SHD market.

WAP and XML are gaining support from powerhouses like Nokia, Ericsson, Motorola and

Phone.com.

The microchip technology currently cannot integrate the RF functions (required for cellular

capability) and digital functions on to a single chip currently hindering an elegant form factor. To

mitigate this, Palm recently announced a cell-phone add-on to its existing Palm V design.

The technology savvy early adopter takes pride in mixing and matching as well as tinkering with the

add-ons and standards, but the technology neutral pragmatist wants simplified convergence,

compatibility and consumer appliance characteristics.

Predictions for the future for Mass Market

We believe that to make the smart handheld device appealing to the early majority:

All Operating system platforms should incorporate wireless APIs in their very structure. They

will provide a connector-standard such as Handspring’s Springboard and Palm’s Secure Digital.

Advances in microchip technology are essential to integrate RF and digital functionality. This

will drastically reduce the footprint of the printed circuit boards used in the SHDs. Palm is

apparently in talks with Lucent, TI and Analog Devices to integrate these functions.

Uncertainties

Since the capabilities of the individual operating systems are yet to be proven for a smart handheld

device, considerable uncertainty exists over which OS will dominate. In the event that Microsoft or

Symbian OS dominates, manufacturers of SHDs will embrace them in lieu of Palm OS. Although

WAP is a promising early-stage micro-browser protocol, newer technologies like XML which have

broader appeal can eclipse WAP as the de facto wireless application protocol. This makes it difficult

for Palm to embrace one protocol in addition to developing its proprietary web clipping API.


3.2.4 Content and 3rd party applications

Common personal information management (PIM) solutions include address book, calendar, email

and other personal data management tools. Palm also offers a web clipping platform from 3rd party

software vendors that takes HTML code and translates it into the web clipping application format.

Once this application is installed on a Palm OS platform device, content is delivered from the content

provider's own web site as a subset of the HTML 3.2 standard. A repository of over 250 web-clipping

applications offered conveniently through a content portal named Palm.net helps individuals

customize their own experience as they see fit. Several providers such as Vindigo, AvantGo and

Yahoo also deliver content. Financial services and airline booking are some of the other applications

available. But though there are over 5,000 applications designed for Palm-like devices, most are not

designed specifically for the "smart-handheld” market.


Voice-enabled, location-based services will allow users to get context sensitive access to relevant,

customized information, thereby enhancing significantly to them the benefit from the SHD.

Synchronization services will allow users to enter information just once in any device with

assurance that the information will automatically be updated in all their connected devices,

including cell phones, PCs, and their smart handheld.

Personalization services will give one-click access to a dynamic summary of the personal

information that matters most - bank balances, travel reservations, investments, email, shopping,

bills, calendars, and much more from their smart handheld device.

Uncertainties

Identifying the killer content application remains the single most important dimension that will

decide the fate of SHDs in the future. Will consumers seek location-based information using the

voice interface? Will they be willing to give up some of their privacy concerns and trust a third party

vendor to offer them personalized content including their bank accounts? Will they seek out targeted

application-specific solutions or generic one size fits all solutions? It remains to be seen.


3.2.5 Pricing and Revenue Models

Currently subscribers of cellular phones are receiving equipment for free, but are committing to a

certain service plan. Whereas, customers of SHDs are not only subscribing to a service plan, but are

paying up front to obtain the device or equipment. Palm currently charges a $35 monthly

subscription fee for services for its Palm VII brand. Above all, the current SHDs are relatively very

expensive (Refer to Table 1) Early adopters are relatively price insensitive, but in order to accelerate

adoption of these devices by the early majority, pricing is crucial.


In order to obtain customer lock-in in this emerging SHD market with several competitors,

innovation in pricing will be key. Some of the revenue models in vogue are mentioned in Section

2.5.

Uncertainty

So far, in the cell phone market, revenues are generated by selling the handset and services together.

Several different pricing structures have evolved due to the hypercompetition that has developed in

this market space. Adoption of the SHDs by the mass market is difficult to predict because this new

invention has to pass the economic test and not just technological test. Different pricing mechanisms

have to be tested to reduce uncertainty.

3.2.6 Accessories/Companions

Palm has always employed a strategy of add-on and plug-in expandability to deliver customized

solutions tailored to the varied needs of users. Its support for Palm OS licensees and alliances with

Kodak, Rand McNally, Omnisky and other providers have generated solutions for digital imaging,

personal GPS navigation and wireless connectivity. To expand a Palm device's functionality, the

Palm OS, until recently, supported four expansion protocols: Compact Flash, MultiMedia Card

(MMC), Memory Stick (Sony Corp.) and Springboard (Handspring). Now, Secure Digital (SD)

technology for the expansion slot has been added to this group to enhance data portability and

complement wireless access.



SD may enhance the use of Palm SHDs for sales force automation and customer relationship

management applications.

Combining the use of a SD card with a snap-on peripheral presents even more multifaceted

expansion options in the future. For example, a user might pop in an SD card of regional

roadmaps and snap on a Global Positioning System (GPS) module, and the two would work

interactively to pinpoint the user’s location, which would be displayed on the Palm handheld.

In addition to Secure Digital, Palm's expansion card slot will also accept miniature I/O devices,

including those using the Bluetooth protocol - an open, short-range digital voice and data

transmission protocol for mobile and desktop devices.

Uncertainties

This represents a classic chicken-and-egg situation in which Palm's connected handheld installed base

will drive the adoption of more accessories, retrofits, and complementary, snap-on gadgets. Palm

faces an uphill battle considering the competition it faces in Europe from local players such as Nokia,

Ericsson and Psion. All these players share a common operating system named Symbian and have,

arguably, created momentum amongst a common set of accessories vendors and complementary

product manufacturers in Europe.

In summary, the key drivers to the future success of Palm include:

the ability of Palm to reduce its prices and also come up innovative wireless pricing strategies

the number of services available from the device, such as a bank balances, travel reservations, etc.

how well Palm allows developers to easily build applications and include connectivity APIs.

leveraging the large developer base (100,000+) and creating developer base in Europe

integrate with future technologies into the device, such as the SD card and bluetooth

making devices increasingly easy to fit in your pocket but maintaining large screen sizes

designing devices which take advantage of the current wireless bandwidth available

ensure Palm devices can be easily synchronized with computers and other devices


4 Strategy for Palm

4.1 Product roadmap

We suggest a product roadmap for Palm in order to capture the mass market for SHDs in Europe.

The following table shows product releases over the next three years with main features, target

market, and rationale for suggestion

Date Product Main Features Target Market Rational1H 2001

Palm VII GSM/GPRS version

-Existing Palm VII enabled for GSM network

-Consumers who need real-time data access-Heavy PIM users not content with WAP enabled phones

-GPRS adoption-Nokia/Ericsson building initial market share-Need for quickly introduce wireless-enabled version to grab mind share

1H 2001

M200 & Palm V+

-Secure Digital expansion slot allowing backup and dtata intensive services

-Corporate users with heavy data usage- Students and other entertainment target markets

-all PDAs incorporating SD & wireless. Palm definitely needs to keep-up with the market-need to create product extensions for m100 & Palm V

1H 2001

- USB port - bluetooth - phone snap-on

-snap on phone device – brings voice capability for m100, III, V-2.5 and 3 G capability

-Handspring users -promote complementary technology like Handspring model -Stealing the phone industry market share

2H 2001

SD add ons -I/O for SD card - consumers and business verticals (ex: healthcare)

-design I/O to be optomized for Palm OS.

1H 2002

M300 &Palm V++

-bluetooth integration-ARM-2.5 G / 3G capable

-upgrade from m200 and Palm V+

-keep up with technology trends & create HW to support computational intensive apps.

1H 2003

M400 &Palm V+++

-Full multimedia capability (streaming video & audio)-Voice recognition as inputting

-PDA / phone market -Initial W-CDMA deployment-Proliferation of multimedia content providers over wireless Internet

For the next one year, Palm needs to focus on introducing a wireless-enabled product as quickly as

possible to grab the initial market. The development of the WAP market in Europe still remains a

small but it has begun to ramp up with the introduction of Nokia 9210 Communicator and Ericsson


R380. Palm needs to work with wireless service providers to figure out how content can be delivered

over the existing Palm VII design with minimal modification.

This effort must be supplemented by accelerating overall PDA diffusion (Palm m100, III, IIIx, V) to

increase customer awareness and to encourage application developers community in Europe.

Contingent upon this action, Palm needs to provide non-wireless users with a migration path to

become wireless. This can be done by introducing a wireless add-on, possibly integrated with phone

capability.

4.2 Standards

Palm should allow users to “look inside”, but not allow to update the Palm OS. This strategy will

benefit Palm because it can still continue to license the OS and can also encourage the developer

community to build applications that will increase adoption. The OS should have standard APIs that

allow for easy development of applications.

The adoption of a wireless standard is important. Considering the fact that GPRS is being touted as

the emerging standard in Europe, Palm should adopt to GPRS instead of using some proprietary

standard.

Establishment of Secure Digital to allow other devices to plug-in is important. As devices for

different functionality like MP3 players, digital cameras and smart cards converge, vendors can

configure their devices to fit into Palm using Secure Digital. To succeed, Palm should encourage

device makers to make Secure Digital compatible devices. In doing so, Palm competes with other

standards like Handspring’s Springboard. To make Secure Digital, Palm needs to leverage its

installed base.

4.3 Growth strategies

To grow its market share and to build a sustaining competitive advantage, Palm can use the following

strategy:


Build on its initial strength – simplicity and elegance. Continue to apply its rigorous design

philosophy and aesthetics as consumers demand more from their Palm.

Nokia and Ericsson are incorporating PDA capabilities into a cell phone based on Symbian’s

EPOC OS. They have a first mover advantage in gaining initial consumer interest ahead of Palm.

Therefore, instead of directly competing with Nokia/Ericsson, Palm should target slightly

different market segments that put more value on dynamic data retrieval and manipulation than

voice capability.

Integrate voice capability through plug-in/add-on solutions. Palm can position its device as a

complementary to cell phones connected via Bluetooth or provide a snap-on phone peripheral. It

would be difficult to create competency in voice communications internally as Palm started as a

PDA supplier. Also, Nokia and Erricson’s core competencies are in voice and both have long

history of operations and brand recognition.

Palm’s competitive advantage over Symbian OS is its large application developer community. It

should replicate the creation of the community in Europe, especially wireless applications. To do

so would require early integration of wireless APIs into its Palm OS.

Also, Palm should use the collective strength of Sony, Handspring, and other partners to promote the Palm OS. This includes leveraging the large developer base (100,000+) and making other strategic investments in emerging application vendors to enhance the Palm Economy, which further enhances network externalities.

5 Bibliography

Books and Articles

Derek J. Brown, (April 2000), “ The European Wireless Web”, Robertson Stephens Internet ResearchGeoffrey A. Moore, (1999), “Crossing The Chasm” , Revised Edition, Harper PerennialJill House, (November 1999), “Smart Handheld Devices Bulleting: All in Sync”, IDC Market Analysis and ForecastLinda J. Mutschler, (March 2000), “The Next Generation IV: Wireless in the US”, Merrill Lynch Research Report Marianne Wolk, (June, 2000), “Wireless Data: The New Economics”, Robertson Stephens Technology Research


Marc A. Cabi, (July 2000) “European Wireless Technology”, Credit Suiss First Boston Equity Research ReportNathan Rosenberg, “Uncertainty and Technological Change”Palm Inc., (August 2000) “Annual Report”, Palm Inc. 10KPalm Inc., (2000), “The 2nd Story: Building on Success-Palm’s Expansion Strategy”, Palm Inc. White Paper Vik Mehta, (July 2000), “Technology: Mobile Internet”, Goldman Sachs Global Equity Research ReportWalter S. Mossberg, (November 2000), “Minimize Your Digital Clutter With Handspring VisorPhone”, The Wall Street JournalWalter S. Mossberg, (November 2000), “Sprint Attempts to Add Organizer to Cell Phone”, The Wall Street Journal“Unleashing the Internet”, Fortune Magazine Tech Guide

Websites

www.ericsson.comwww.freedgar.comwww.jxwireless.comwww.nokia.comwww.nttdocomo.comwww.palm.comwww.wsj.comwww.jxwireless.com


http://www.jxwireless.com/

http://www.palm.com/



http://www.nokia.com/

http://www.ericsson.com/



Date post:	21-May-2015
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