Comm Corner has covered the PDA (personal data assistant) market in the past. Since I will be sharing column responsibilities with John Woody, my focus will be more in the direction of the PDA market. This focus is certainly warranted since the world of PDAs is a rapidly changing one, as ever increasing numbers of people are using them for work, play and personal time management.

It is easy to get confused with the terms being thrown around when it comes to small handheld computers, so let’s begin with a definition. This article and future PDA articles will be referring to a device that you hold in the palm of your hand---since it has no keyboard, a stylus is required for writing onto the screen. Devices that fall into this category include, among others, the Palm Pilot, Handspring as well as the Sony products that run the Palm OS. We also include in the PDA group those devices known as “Pocket PCs” from Compaq, HP, Casio, and others that run the Windows CE operating system.

Now that we have definitions out of the way, let’s take a look at the PDA market which turns out to be very similar to the PC market: a multitude of hardware manufacturers, but only two dominant operating systems that look like they will be around for a while. And just as in the PC world, you have both Windows and the MAC OS, so in the PDA world you find Windows CE and the Palm OS. The ironic part about this is that in the PDA world, the Microsoft PDA OS, Windows CE, has a market share closer to the MAC OS, while the Palm OS has the market share of Windows. One very important difference between the two OS’s is this: 3Com owns the Palm OS as well as making the Palm Pilot hardware that runs the Palm OS. Microsoft, on the other hand, owns the Windows Pocket PC OS, but elects not manufacture any devices that run the OS.

After several years on the market, both Palm and Microsoft this year released the 4th version of their respective OS’s. In case you think of the PDA market as being new, consider for a moment the Apple Newton released in 1993 — most consider the Newton to be one of the first genuine PDA. Some of the features you find in today’s PDAs were introduced in the Apple Newton OS. Today the Palm PDA name has become synonymous with PDAs, the way we used to call a photocopy of anything a Xerox. If you have a PDA in your hand people will say “Oh you have a Palm Pilot.” Sales of Palm OS devices make up well over 75% of the market with some estimates running as high as 85-90%. While Palms have captured a lion’s share of the market, Pocket PDAs have made strong gains during the past year. Beginning with Microsoft’s introducing its third release of its PDA OS just last year, Pocket PC hardware has started to make a noticeable impact on the PDA market. Microsoft’s market share continues to increase at the expense of the Palm Pilot share. With the new release of Pocket PC 2002, it looks like the Microsoft PDA OS will continue this trend.
 
A new research report by Aberdeen Group, a technology provider of market consulting and research, predicts the PDA market will reach $6.6 billion by 2005 with approximately 39 million units shipped. While the market for PDAs has undergone a recent slow down, many analysts feel that the decline is a direct reflection of the broader economy. Market researcher IDC has cut its forecast for the handheld industry, now predicting that U.S. unit sales could be flat with those of a year ago. IDC had earlier predicted that U.S. handheld shipments would be 20% above last year's 5.3 million units. IDC now estimates that shipments are likely to be anywhere from flat to 15 percent above last year's levels, due primarily to the wide level of uncertainty and the shaky economy. On a global basis, IDC has also revised its unit growth forecast for handhelds. Once predicting nearly 50% growth worldwide this year, IDC now expects roughly 10% to 20% growth above last year's 10.4 million units. Reflective of Microsoft’s improving competitive position, other research firms now estimate that within 3 years, the market will be evenly split between the Palm OS and the Windows CE.

Although we plan to take a closer look at Pocket PCs in future articles, we would like to focus special attention here on the Palm OS, which, it turns out, is much simpler to explain than the Windows CE OS. Take a look at how Microsoft explains the definition on its Web site:

“What is the difference between the terms ‘Handheld PCs,’ ‘Pocket PCs,’ and ‘Windows CE?’ Pocket PC and Handheld PC refer to specific types of mobile devices while Windows CE is the operating system that is at the heart of all Handheld PCs and Pocket PCs. . . Windows CE is a compact, modular operating system that was designed from the ground up to support a broad range of client devices combining the flexibility and reliability of Windows with real-time processing support.”

The Palm OS is considered the simpler of the two operating systems. When it was first released, the Palm Pilot was basically an electronic version of a paper based time management system. It has evolved and grown into much more over its 5-year life. 

A brief time-line of the Palm OS reads like this:

• Mar 96; Pilot 1000 and Pilot 5000 organizers introduced with the first version of the OS 1.0. 
• Mar 97; Palm Pilot Personal and Palm Pilot Professional organizers introduced with the second version 2.0 of the Palm OS.
• Dec 97; Palm begins licensing its Palm OS Platform. (It lists 10 Licensees on its Web site today.)
• Mar 98; Palm launches the Palm III organizer, the 3rd generation of the Palm Pilot, with the 3rd version of the Palm OS.
• Feb 99; Palm launches the Palm V organizer, the most popular Palm Pilot model to date, with the 3.5 vision of the Palm OS.
• Mar 01; Palm launches the Palm M500 series of organizers and the 4th version of the Palm OS.

The most important thing to remember is that all Palm OS devices, including 3 Com’s Palm Pilots, Sony’s Clie, Handspring’s Visor, had and still have the basic personal or business time management tools as part of the operating system. These elements are at the core of the operating system. The simplicity and ease of use of these four basic tools is what made Palm OS devices so popular: contact list management, to-do list management, calendar, and note taking. These basic functions are easy to learn and simple to use. As time passes, 3Com continues to add more and more tools enabling PDA users to take advantage of a widening variety of functions. Although the OS has seen many improvements in a relatively short span of time, studies show that the majority of people use their Palm OS devices for two main components: the contact list and the calendar.

Not long after the Palm OS was released, a very strong development community sprang up and continues to thrive today. With encouragement from Palm, developers have created add-on applications to fill in or add functions to the Palm OS. Palm states on its Web site that they have “more than 16 million users and 11,000 commercial applications…,” which greatly outnumbers the Pocket PC community. If there is something you would like the Palm to do for you or help you with, you should be able to find an application on one of the many Palm OS Internet sites. With these applications, it is easy to see that the Palm can do a lot more than just manage your phone numbers, to-do list, appointments, and notes. 

In a nutshell the Palm OS is: easy to use, versatile with its thousands of applications, the industry leader in PDAs with an installed user base of over 16 million people. This is the primary reason that Palm has the lion’s share of the market. Although the Pocket PCs have come on strong recently, they still have not achieved the broad based market occupied by Palm OS.

In future articles we plan to look at several topics — among them, Windows CE OS, the different types of hardware available for the Palm OS and what difference they make, as well as the various applications available for the Palm OS. We welcome your suggestions as to other topics of interest.

Everyone is welcome to attend the PDA SIG, which meets on the second Wednesday of the month.