Palm launches new handhelds

Palm Inc. fired the latest salvo in the personal digital assistant (PDA) wars with the announcement of two new devices, the monochrome m500, and the 16-bit color m505.

Both have 8MB of memory, run the new Version 4.0 of Palm's operating system and have a new Universal Hotsync port, as well as improved screen readability and battery life. The m500, priced at $399, will be available in the U.S. late next month, and the m505m, priced at $449, will be released in early May. Both models will ship worldwide about a month after they hit U.S. markets.

The m500 and m505 are Palm's next-generation PDAs, as evidenced by their size and features lists. The devices are very similar in appearance, size and weight to Palm V devices: They are thin, aluminum-covered PDAs. But where a Palm V has a monochrome screen, the m505 is color. In the past, color screens have required bulkier machines to contain the extra batteries needed to power them for useful amounts of time. Now, however, Santa Clara, Calif.-based Palm said a new lithium polymer battery allows the m505 to run just as long as a Palm V -- which this reviewer found to be about two weeks of normal use. M505 review units weren't available at deadline.

Improvements include an e-book reader, plug-in card synchronization and Universal Serial Bus (USB) connectivity with Macintosh and PC computers out of the box. In addition to audio alarms, users also have two silent options: the Palm can flash an LED or vibrate. Users can set their Palms to "lock" after a certain amount of time and require a password for access.

On the desktop software side, Palm beefed up security and added support for vcard and vcal, two formats also supported by Microsoft Corp.'s Outlook for exchanging contact and calendar information. Selecting a vcard, for instance, will add the contact to a user's Palm desktop software, which in turn will appear on the handheld when synchronized.

The new Palms are "good devices and answer some people's concerns in light of competition [from Microsoft's Pocket PC]," said Alex Slawsby, an analyst at IDC in Framingham, Mass.

In the past, Palm has lost market share not only to other Palm-compatible devices, such as Handspring Inc.'s Visor and Sony Corp.'s Clie, but also to devices such as Hewlett Packard Co.'s Jornada and Compaq Computer Corp.'s iPaq, which run the Pocket PC operating system. The Pocket PC devices have typically offered bigger, easier-to-read color screens and better integration between PDAs and PCs for programs such as Microsoft Word and Excel. Also, Pocket PC handhelds can read plug-in cards and double as MP3 players out of the box. On the other hand, Palm devices have traditionally been smaller and less expensive and had significantly longer battery lives.

Possibly in response to Pocket PC competition, and also the popularity of MP3 music files, a new slot on the top of the Palm m500 and m505 will read and write to secure digital (SD) and multimedia cards. Though third-party devices running the Palm OS had offered plug-ins, Palm had eschewed them because of the extra battery drain. Now, however, Palm said it adopted SD because of the minimal power needed to run the cards and their size. The cards' small size also keeps PDAs small. Palm said an array of SD accessories, such as memory backup modules and Lonely Planet travel guides, will launch with the m500 next month. The company also said that such SD devices as a digital camera, MP3 player, Bluetooth antenna and Global Positioning System (GPS) will be available.

Analysts, however, questioned whether a postage-stamp-size connector can physically support a digital camera or GPS. "I don't see the technology as a problem. I see ruggedization as the challenge. If I stick something into that slot and it's hanging out, it's going to be fragile, and I'm going to have to be careful," said Frank Gillett, a senior analyst at Forrester Research Inc. in Cambridge, Mass. PDA users don't want to wear kid gloves to access their phone book, he said.

On the other hand, Palm said the new Universal Hotsync standard covers not only the port at the bottom of the Palm where keyboards or modems can be plugged in, but also the contact points on the unit where other devices attach. Combined, those could make the devices rugged enough for normal wear and tear.

The Universal Hotsync standard makes all existing accessories incompatible with the next generation of Palm computers. "It means three years from now I'll be glad, but now it's a headache," said Gillett.

Lack of accessory interoperability between Palm computer accessories is nothing new. The III and wireless VII series weren't compatible with the newer V series peripherals, and last year's low-end m100 introduced yet another Hotsync port. With each new generation, users wanting to upgrade have been forced to pay extra to get new keyboards, cameras, cradles, travel cables, modems or GPS add-ons.

Critical reception

Analysts said the new devices will appeal largely to previous markets. "This is just sort of an evolutionary improvement in Palms' capability in serving execs and knowledge workers with PDAs," said Gillett. One limitation is the small size of the screen. "They're good at contact, calendars and short e-mails, then beyond that it gets difficult in this form factor."

In addition, he said that consumer studies show that the devices are still too expensive for mass adoption and that cell phones will likely replicate the contact and calendaring abilities of PDAs within the next three years, meeting most people's current PDA needs.

Also, don't expect the new Palm devices to cause an enterprisewide firestorm of adoption. "I don't see this as a big enterprise device," said Gillett. "[Palm is] introducing a PDA for the elite and the affluent, because they're the only ones who want a PDA that can do more than what will go into your cell phone."

Palm vs. Palm

Palm's foray into plug-in territory goes head-to-head with Handspring's Visor, which runs the Palm OS.

To date, all Visors have featured USB connectivity out of the box and a Springboard slot that allows users to expand their Visors with such plug-ins as MP3 players and digital cameras. Palm's SD support and USB synchronization out of the box will directly challenge Handspring's distinctiveness and potentially lead developers to first release their plug-ins for Palm, which has the larger installed base of PDA users.

Handspring will have to respond, said Gillett. "There are two avenues here: Either their plug-in modules are so cool that they overcome the [larger] size factor, or they dump their current form and go to something much smaller."

In fact, Handspring's most recent PDA, the Visor Edge, seems to take a middle approach. Instead of the Springboard bay being built into the back of the device, it clips on. Without it, the device looks like -- and competes with -- the similarly aluminum-shelled, thin, lightweight Palm V. One ongoing advantage for Handspring, said Gillett, is that next to Palm, it looks like Apple vs. the PC makers. Like Apple, Handspring is a smaller company, meaning it might have an edge in getting future innovations to market more quickly than Palm.

Sony's series of Clie PDAs, which are also Palm-compatible, also accept plug-ins in the form of Memory Sticks. But so far, the Clies, which are more expensive than similar Palm products, have accounted for only minimal PDA sales. A forthcoming color Clie with 320-by-320-pixel resolution (all Visors and Palms have only 160-by-160 resolution) could change that.

New Palm devices aside, analysts said they think that other PDAs will continue to challenge Palm. "We don't really see [Palm] reversing the slow trend of their market share moving away," said Slawsby.

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