Palm vs. Symbian -- Sony picks Symbian

Sony provided confirmation this week that the PDA market is in decline. This is especially bad news for Palm, which has never made the transition to a true smart phone profile. Bill Snyder writes in The Street that Sony's move has "put additional pressure on PalmSource to increase revenue from its smart phone business." And he goes on to report that smart phones currently contribute 25% of the company's revenue. But here he is referring to PDAs with phone technology integrated. Consumers are looking for a different form factor for the device, not just additional features integrated into the still bulky Palm profile.

Is Palm Finished?

The more interesting detail of this announcement is buried in the comment that Bill Snyder reports Todd Kurt (of Gartner) having made about Sony's future plans:

But Sony likely won't develop [future] devices around the PalmSource operating system, Kort said. For some time there was confusion about why the company was using the PalmSource software in its PDAs while Sony Ericsson phones were built around Symbian's rival operating system, he noted. "It looks like they finally made a decision."

It would seem that Sony doesn't believe that Palm has the ability to address the smart phone market. Jay Wrolstad, writing for Newsfactor reports on the comments of IDC analyst Dave Linsalata:

"This is a sign that smartphones are co-opting the basic PIM function of PDAs and drawing more customers to a single device that delivers voice and data capabilities,"

CNET News.com reports on new research from canalsys.com showing Nokia continuing to lead in the smart phone market and showing Symbian with 90% market share in Europe and almost 60% market share outside Europe. Of particular interest in this report is the table which shows Q1 2004 sales against the year ago Q1 2003 sales. PalmOne shipped fewer devices worldwide, dropping from 1.09 million a year ago to 995,000 this year. This decline comes in a market that is still growing strongly -- shipments from all vendors increased from 4.2 million to 5.9 million. This kinds of declines tend to accelerate as a vendor loses traction, and the loss of Sony will certainly hurt in the quarters ahead.

Bloggers Weigh In

Not much sympathy from bloggers. Om Malik writes "The only thing that is left to drive a stake through Palm’s heart is defection of Treo to Pocket PC." Marc Canter writes that he had been counting on Sony to buy Palm but now "...I wonder if this will still happen." It looks like some dark days ahead for Palm.