PalmSource CEO: More licensees on the way - and we don't fear Dell

NEWS PalmSource, the custodian of the Palm operating system for mobile devices, has spoken out against a Wintel-based, clone model for handhelds but admitted Dell's imminent entry into the PDA market will "have an impact". David Nagel, PalmSource president and CEO, in London today to promote Palm OS 5, said: "Dell certainly will have an impact in the handheld computing market... but mainly because of their distribution and sales [expertise]. They will bring Microsoft PocketPC pricing closer to that of Palm [OS-based devices] but even Dell can't close that gap completely." Palm will soon announce it has licensed its operating system to several more hardware companies, Nagel said, although he wouldn't be drawn on whether Apple, where he was once head of R&D for the Mac and Mac OS, and Legend, China's largest PC vendor and a key bridgehead into that giant market, are on the roster. He admitted some of the new licensees will also have signed up to the two main competing operating systems - Microsoft's PocketPC and Symbian, which is backed by the major mobile phone makers and mainly used on smart phones. Despite Dell staying loyal to Microsoft, Nagel added: "There is a reticence [by manufacturers] to commit to a single platform." While the overall market for PDAs has been flat for a year or more, PalmSource, now almost completely cast off from Palm the hardware company, will point out its share of the market has remained steady and it has by far the most users by units shipped. Although analysts have said vendors that use the Palm OS must sell less expensive devices to survive - for example Palm's high end Tungsten W, the first to use Palm OS 5, comes in at £399 even if the company also now sells a sub-$100 Zire handheld - PocketPC-based devices are generally more expensive. Dell's debut will see PocketPC devices pushed under the $300 mark in the US but PalmSource's Nagel stressed the company he runs will prosper in spite of this price pressure and the will of Microsoft, which he said loses money on each PocketPC device sold. He cited reasons including Palm software's ease-of-use, a commitment to Java, the new OS - which supports fast, ARM-based processors, an area where Microsoft has had a lead - and a strong and growing developer community. The main message, however, was that Microsoft will back a market of clone, Wintel-based handhelds, whereas Palm is looking at allowing manufacturers to maintain profit margins through various types of specialised devices.