If Treo Rumors Come True - InformationWeek
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11/5/2004
06:16 PM
David Haskin
David Haskin
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If Treo Rumors Come True

Last week in this space I suggested that palmOne would benefit greatly if the rumors of a Pocket PC Treo were true. Upon reflection, I now think I understated the case. Not only would a Pocket PC Treo push palmOne several notches up the mobile device food chain, but failing to deliver such a device would severely damage the

Last week I suggested that palmOne would benefit greatly if the rumors of a Pocket PC Treo were true. Upon reflection, I now think I understated the case. Not only would a Pocket PC Treo push palmOne several notches up the mobile device food chain, but failing to deliver such a device would severely damage the company in the long term.

I've talked with many IT managers and technology executives in the last year about their plans to mobilize applications. Increasingly, they are making decisions on what devices to use based on platform and, in the enterprise, that platform increasingly is Microsoft's. That attitude has been reflected in increasing sales of Pocket PC handhelds to the enterprise.

As a result, a Pocket PC Treo would not cannibalize sales of Palm OS Treos except, perhaps, slightly in the consumer market. And, for now, that represents a relatively small percentage of Treo sales. There is great loyalty for the Palm platform among consumers, but such loyalty doesn't go very far in the hard-headed, Microsoft-dominated world of IT. For palmOne, then, there would only be upside to a Pocket PC smartphone.

Then, there's the issue of PalmSource, palmOne's one-time sibling that develops the Palm OS. Since a Pocket PC Treo would provide mostly incremental sales for palmOne and wouldn't cannibalize sales of Palm OS Treos, there would be little damage to that company, at least in the short-term. In the long-term, PalmSource must come up with something truly incredible if it is successfully buck the Microsoft juggernaut, but that's been their challenge for the last couple of years at any rate.

PalmOne has a script to which they are strictly adhere that keeps the door open to a Pocket PC device, but it provides little guidance beyond that. However, I'm convinced this is a crossroads decision for the company. If it chooses to develop a Pocket PC Treo, it stands a far better chance of competing not only against the HPs of the world but also against giants like Nokia and the Symbian platform. Failing to develop such a device, I believe, dooms palmOne to being a second-tier player, at best.

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