Palm's death spiral begins

Posted September 27, 2005

Yesterday, Palm held a big press event with Bill Gates and the CEO of Verizon to pre-announce their next model Treo. It doesn't have a name yet, though the rumor sites have dubbed it the 700w, but the huge, mind-blowing thing about it is that it is running Windows Mobile rather than the PalmOS.

Disgusting. Today I sold my Palm stock (at a hefty loss, since I bought it pre-reverse-split, I might mention) and additionally ceased accepting registrations for the PalmOS software I've written. Yes, all DaggerWare software is now freeware, if anyone is still using it out there.

It's a bad move from my perspective, because PalmOS was essentially the only operating system in the PDA/smartphone space that doesn't really suck. It wasn't great, but at least it was an alternative. Now, with PalmSource sold to Access, and Palm obviously hedging their bets (yeah, right: Windows is clearly their plan from now on... as if Microsoft would do a deal with them without making sure they were ceasing to be a competitor), that alternative is going away. Man, what I wouldn't give for Apple to toss their hat into the ring about now with a pdaPod...

It's also a bad move from a business perspective, because it is turning Palm from a unique company into just one more Windows licensee, and truth to be told, they can't compete in this space. Their hardware is made by the same company, HTC, that does a bunch of other Windows handhelds, and the degree of innovation they can implement without retaining control of the OS is fairly limited. So, while they may get a short-term business boost from professionals snapping up Windows Treos for the double name recognition, in the long run they are going to be trounced by other companies shipping better, cheaper units that work exactly the same as Palm's do. Palm hardware has always lagged significantly in capabilities and price against Windows devices, and until now it was just their OS that let them carve out a niche despite that.

Well, goodbye niche.