Palm Computing will release the new handheld, dubbed the Palm IIIc, in February, sources said, marking a major milestone for the company and the latest salvo in its ongoing battle with Microsoft for the minds and wallets of gadget lovers. Arguably the most anticipated product release from Palm, the introduction of the IIIc will coincide with its initial public offering, also expected in February.
Palm declined to comment, citing a policy of not discussing unannounced products.
The move could present challenges for Palm. The color-display release presents a new set of thorny issues for the company, which has so far predicated its marketing and development strategy on a so-called Zen of Palm principle, which mandates keeping devices as simple as possible, even at the expense of cooler features. By their very nature, color displays are exceedingly complex to implement, which raises questions about whether Palm is unwisely veering from its tried-and-true strategy.
"I think they're probably just slamming it in there because everyone told them they have to do it," said Ken Dulaney of Gartner Group. "People think [Palm is] kind of brain dead because they can't do color--they give the explanations, but no one listens to that, so they have to throw things in there and see what happens."
The company has been setting the groundwork for the release of its color-screen handheld for some time. In October, at the PalmSource developer conference, Palm released the first version of its operating system to include support for color screens, and executives confirmed that the company was planning a color device for release in the first half of 2000. Soon after, Motorola--whose Dragonball processor is used in all Palm-based devices--announced a faster processor capable of powering devices with color displays.
A color device from the soon-to-be independent 3Com subsidiary has been long-awaited by handheld computing enthusiasts. But Palm executives have repeatedly cited the technology constraints imposed by including color displays, including drains on battery life, bulky designs and high costs, promising that the company would not release a product before these issues were resolved.
While it's possible that Palm has hit upon color display nirvana, it's more likely the company has found some technology compromises it could live with, analysts said. At the same time, despite the coolness factor, it is still unclear how important color displays are to PDA (personal digital assistant) buyers, as evidenced by the tortured sales of Microsoft-based devices, which have included color screens for about a year.
Palm currently holds about 75 percent of the handheld market, according to a variety of market research groups.
"If you look at most users today, they love the Palm V," which has a black-and-white display, Dulaney said. "It's got everything they need. You never hear anyone complain about no color."
Color displays fall into the company's larger strategy of creating a booming "Palm Economy," of developers and licensees, creating applications and Palm-based devices of all shapes, sizes and uses. Back-lit, black-and-white displays are not as clear or legible as color screens in larger designs or for outdoor uses.
"There's not a lot of advantages that accrue from color displays for Palm," said Will Nelson, editor of smaller.com, an online resource and e-commerce site for handheld users, noting that the company has not yet developed the applications and multimedia support which make color screens compelling. "The Palm operating system is somewhat limited in functionality and memory, so that many of the things you'd like to do with color, Palm is not equipped to do."
By adding color displays to its product mix, Palm has negated the one technical advantage of Microsoft's scaled-down Windows CE operating system. Palm may also be walking into the same problems Microsoft has grappled with over the last year, including clumsy designs and unacceptable battery life.
"One of the reasons the Palm battery lasts so long is that people don't use them the way people use Windows CE devices," Nelson said. "They're on the cusp of running into some of the problems that Microsoft has already solved."
Palm will also release the Palm IIIxe, the successor to the IIIx, around the same time as the IIIc. The IIIxe will upgrade the memory capabilities of the IIIx to 8MB, sources said.