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THOUGHT: Palm OS is Dead [unwired::cast]
Posted by Alfredo Padilla - on Friday, 15.09.06 - 22:52:52 CET under 09 - Thoughts - Viewed 13546x
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This week we saw the release of the new Palm Treo device, the Treo 750v. This article isn’t going to be about this phone in particular, but I did want to mention that despite some flaws I think it looks like a great device and is definitely on my radar for when I upgrade. What I did want to speak about is the operating system that isn’t on the device, Palm OS.

Because I was excited about the 750v I’ve been reading some Treo centric web sites recently to get the scoop and because I enjoy hearing other peoples’ thoughts. I must say that I wasn’t expecting the amount of hand wringing and consternation that I encountered. Now, I understand that forums are generally places that people go to complain or to rave about something, but I frankly did not expect the number of complaints.

Chief amongst these were people who complained that the device sported Windows Mobile rather than Palm OS. When someone would explain the reason why (that Palm OS simply isn’t worth the investment anymore) the response would sometimes be resignation to reality, but just as often visceral comments about Palm OS being “the best” and Windows Mobile “sucking”. This isn’t going to be an article about which operating system is better; I think suck arguments are often meaningless. What I did want to address is the comment that Palm OS is not longer worth the investment.

I happen to agree with this argument, and truly believe that Palm OS is dead. This doesn’t mean we’re never going to see Palm devices again, the 700p was a nice upgrade to the 650 and I believe there’s a new Treo running Palm OS on Cingular’s roadmap for this year. What I do believe though is that the operating system will slowly fade away and eventually disappear, probably within the next year or two. It’s going to be a slow death but I believe it is inevitable, and I’ll tell you why.

Market Share

In 2005, the last year for which I could find reliable numbers, Palm OS had a 3.5% share of the smartphone market (I’m using the term smartphone in its broad sense here). That was a 3.5% drop in their market share. There were about 50 million smartphone devices shipped that year, and that was a 120% increase over the year before. I expect we will see similar growth this year and into the future. Combine shrinking market share with a rapidly growing market and the fact that Palm OS’ biggest manufacturer is now selling Windows Mobile devices and it doesn’t paint a pretty picture.

What this means is that the number of individuals who are demanding upgrades for Palm OS is quickly going to pass the point where they are worth satisfying. Why would a company invest millions in developing an operating system that serves 2% of the market? As you will see, it seems clear that development isn’t occurring.

Lack of Development

Palm OS simply hasn’t been able to keep up with its competitors. The last major release of the operating system was Palm OS 5, which came out in 2003. Since then there have been incremental upgrades, and it is my understanding that Palm has done a good job of trying to keep it relevant for the past 3 years. That is changing however, and changing quickly. Both of Palm OS’ major competitors have come out with major updates in the past year, and the operating system is being left behind as it lacks multi-tasking and support for 3G GSM networks.

Supposedly the next iteration of Palm OS is in the works, based on a Linux kernel, but with the rapid decline in market share, the OS’ largest customer moving to another operating system, the fact that software vendors are not developing for the new version and muddled signals about when a release can be expected I don’t see a lot of hope here. Even if there is an eventual release of Palm OS sometime in the next year, I feel like the market atmosphere is such that it will have minimal if any adoption.


One of the responses I hear often from Palm OS supporters is that there is plenty of life left in Palm OS 5 if only Palm (the hardware manufacturer) would build this or that feature into it. I’m sure to those who live in the Treo world Palm seems like a large and powerful company, but the reality is that it is a small and struggling company that simply doesn’t have the resources to continue to develop the Palm OS. I think the best way to illustrate this is to look at 2006 revenues for the companies involved with each of the major operating systems.

Does one of these not look like the other? Palm and Access put together are smaller than HTC, much less the likes of Microsoft, Nokia and Sony. There simply aren’t the resources to keep up with Windows Mobile and Symbian. You might argue that this is misleading because these other companies do a lot more than just mobile devices and software, while Palm and Access can commit all of their resources to this arena. That may be the case, except for one small item; mobile devices are an important market. These other large companies have other things they do, but capturing the mobile market is going to be one of their top priorities. Mobile devices are going to be the ubiquitous device that connects us to everything all of the time. These companies know that and are willing to lose a lot of money for many years to ensure that they have a share of that pie. Palm and Access simply can’t keep up with that kind of spending.

Now What?

Palm (the manufacturer) is in a difficult situation; they’re a small company competing with major multinational corporations in a market that everyone recognizes is extremely important. In my estimation they made the most rational choice they could have by moving away from an operating system that wasn’t being developed. Moving to Windows Mobile allows them to focus their limited resources on developing and marketing the Treo.

Even with this strategy they are going to have a hard time succeeding. The smartphone market is growing fast, and product releases are happening quarterly. It will be difficult for them to continue to put out relevant products into the future, especially since their product line is basically a one trick pony. If they don’t diversify their product line they will eventually be overwhelmed by competitors that put out Treo clones that have better features and cost less, as inevitably happens with a successful product. Their greatest assets are the Palm and Treo brands, which are well known and respected. Don’t be surprised if Palm gets bought out in the future by some other device manufacturer looking to make a splash, this might be a good move for someone like HTC who wants to move into the consumer market.

Does all this mean that Palm OS is dead? I happen to think so. I suppose there may be a slim chance that a new version of the OS comes out and becomes successful, and if that day comes I’ll be eating plenty of crow. Certainly the market is growing fast enough that a dark horse could make up a lot of ground quickly, but I see nothing from Palm or Access that indicate either company has the vision and resources to accomplish this. It’s more likely that all the Palm OS lovers will have to deal with their angst and decide which one of the other operating systems they want to start using.

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