Palm's Tungsten darts into the marketplace - but will it fly?

Palm has announced two handhelds in its new, high end Tungsten line, first revealed as a strategic move last month (see: http://www.silicon.com/a55677).

The Tungsten W, a connected tri-band GPRS terminal with a keyboard, will be available at the start of next year, initially on the Vodafone network in the UK. The Tungsten T is available now and takes the basic Palm design - stylus, simple screen, connectivity and so on - to another level.

What did we make of these handsets, which weigh in at a mighty £599 (or £399 with Vodafone contract) and £399 respectively? First, some context.

Figures out yesterday from Gartner's Dataquest unit confirm what the industry has long known - sales of PDAs are virtually stagnant. They increased just 0.9 per cent year-on-year during the third quarter, and that has roughly been the story for some time. Research a week ago from Canalys was more optimistic but it concentrated on all handheld devices in Europe (see http://www.silicon.com/a56037).

Although the PDA market is struggling, companies that use the Palm OS did fairly well in Q3. Palm - the hardware part, post-split - has increased its global share to 30.6 per cent from 28.8 per cent a year earlier and Sony claimed 13 per cent with its Clies. It is now just behind HP with the (previously Compaq) iPaq in second place, the most successful unit that uses Microsoft's PocketPC OS.

The biggest victim, as those three have grown, has been Handspring. After initial success with its Visors, some months ago it took the decision to concentrate on the wireless market with its smart phone-like Treo handhelds, which also use the Palm OS. And it may have done so too soon. Its market share has fallen to single figures.

The way out of this slump, Palm will tell you, is to go higher and lower. Its Zire family was introduced weeks ago to target the low end of the market, with cheap and cheerful models, on supermarket shelves for under £100. Yesterday, the high end part of the equation was partially filled in with the Tungsten brands. These machines are impressive but there must be doubts over just how well they can do.

Given a blank sheet of paper and no prejudices over OS - is that possible? - both the W and T models are something we would come up with, given current technology limitations.

The W has always-on GPRS connectivity, though that shouldn't stunt battery life, a previous strength of Palm devices. It allows voice calls, linked to the usual Palm contacts system, though, as one Palm executive said: "The point we'd like to make is that we're not going to stray off into the smartphone market."

In fact, it is clearly a data-centric device, with a full keyboard, similar in style to that found on a BlackBerry or Treo. Settings for the 11 top UK POP3 email account providers are preloaded with another 30 ready to be loaded up - a key factor in making this an out-of-the-box email-ready device.

The T, meanwhile, was described by Palm's UK MD as the company's "most important product for three years". It is the first device to use Palm OS 5.0 and the Texas Instruments OMAP1510 processor, based on ARM technology, and makes some applications fly compared to the way they behaved on the previous Motorola chip.

It features a suitably high-quality screen, Dictaphone-like sound recording at a touch and a new version of Palm Desktop. Connectivity is mainly via Bluetooth, which is always-on - though it can be scheduled to be off at times to save on battery juice.

This is also an impressive device. It eschews a keyboard, however, in favour of an expandable chassis which reveals a graffiti area. The effect is space-saving and attractive, though by necessity the stylus must fit internally, aping - it must be said - the iPaq and other devices.

In addition to its expanding body, users will notice this machine's screen quality, speed and five-way navigation button. It is lighter than the W - itself just 171g - and clearly another step forward in terms of design.

Palm wants to expand the market, and has in its sights on "entrepreneurs, telecommuters and executives on the move and dependent on mobile devices". This handheld will suit many of these people - also a type of user for whom the price tag, often picked up by an IT department, isn't such an issue - but there is little to suggest other companies cannot answer back.

The main problem is that users aren't buying. A pre-Christmas release for the W might have helped but the fear is that adoption of these useful and attractive devices still won't be fast enough for the higher-ups and shareholders of the PDA top tier.

An HP or Sony has other businesses to keep it going until the PDA market matures - which it surely will - but Palm must be bold now. At least, under the new leadership of CEO Todd Bradley, it is having a go and once again leading the way.

Related content:
Is the writing on the wall for graffiti?
http://www.silicon.com/a
Handspring cuts a fifth of its workforce
http://www.silicon.com/a55704
Palm reinvents the PDA
http://www.silicon.com/a55636
Start-up of the Month: Reply Wireless - the WAIP of Savile Row
http://www.silicon.com/a55713
The Gadget Lowdown: Blackberry and the rule of thumb
http://www.silicon.com/a49657