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Commentary: Handspring's big decision

The Palm operating system--to which Handspring has hitched its star--is waning as the OS of choice among corporations. Will Handspring move to Microsoft's Pocket PC?

By Todd Kort, Gartner Analyst

As Handspring targets big business, its big dilemma is whether to stick exclusively with the Palm platform.

See news story:
Handspring stepping into corporate market

Handspring wants to take its Visor handheld PCs and the Palm operating system where Microsoft is going with its PocketPC operating system: corporate America. It's not a foregone conclusion that Handspring will come out of this with a bloody nose. But the company certainly faces some very tough competition, chiefly from Microsoft licensees, but also from Palm itself.

Handspring is No. 2 in the U.S. retail market for handhelds, behind Palm, but it has a relatively small presence in the corporate market. On its own, Handspring's overtures to that sector would likely have failed. The company needs to establish itself in the business to grow and to help sell off excess inventory.

Yet Handspring recognizes its shortcomings. It's good at hardware and selling to the consumer market, but corporate customers want something extra: secure data, system management and wireless communications. To deliver on wireless, Handspring has partnered with Aether Systems and now has technology that allows mobile devices to access corporate data.

For Handspring to mount a successful assault on the corporate market, it will need strong partners, such as Aether, DataVis and Synchrologic, which focus on corporate needs. Aether's Fusion, for example, is scalable wireless technology with building blocks that can extend and enhance business applications to work with any handheld computer. Aether and other wireless hosting services can help enterprises host and build their own wireless capabilities.

But Handspring's biggest problem is Microsoft. The broader Palm operating system--to which Handspring has hitched its star--is waning as the operating system of choice among corporations. Gaining popularity is Microsoft's Pocket PC.

Many companies initially standardized on Palm, but they may re-evaluate that decision in light of Microsoft's progress with Windows CE and the Pocket PC version--essentially an extension of the Office suite that dominates corporate PCs. Supporting multiple standards can be costly and difficult, and many companies may opt to support just Microsoft Windows CE handhelds.

Therefore, if Handspring is serious about corporate America, it should offer devices that use both Palm's operating system and Pocket PC. Doing so will become a bit easier when Palm moves to the same ARM-based chips used in PocketPC devices. Linux, another alternative, will likely be more successful outside corporate America.

(For a related commentary on a recent move by Palm, see Gartner.com.)

Entire contents, Copyright ? 2001 Gartner, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.