Palm Inc. is the leading global provider of Personal Digital Assistants (PDAs) for both hardware and operating systems. The company sold its first PDA in 1996 and quickly established a leadership role in the PDA industry. In a span of four years, its revenues grew from $1 million to $564 million. At the end of the May 1999, Palm had achieved nearly 73% shares of the US market and over 68% shares of the worldwide market for PDA products. There were over 50,000 developers who had agreed to make application software for the Palm OS or hardware accessories for the handhelds.
Although Palm Inc. enjoyed immense growth and dominating shares in the PDA market, the future for this market still remains uncertain in the face of the major competitors' different predictions concerning the directions in which the market will go.
Thus, ‘How to keep the Palm way of PDA a standard in the future?' is a big challenge that the company is facing today.
[...] Moreover, new entrants will have to allocate many resources to overcome existing customer loyalties; Palm Inc was the first in the market and has around 70% shares of the global market. Thus, the threat of new entrants seems to be high as we consider PDA market as a part of the global high-tech market, and if capital requirement, license and the expected fierce retaliation can easily be overwhelmed by powerful firms. The fact that Palm was the first in the market and that OS is relatively difficult to develop cannot restrain some entrants. [...]
[...] enjoyed immense growth and dominating shares in the PDA market, the future for this market still remains uncertain in the face of the major competitors' different predictions concerning the directions in which the market will go.[1] Thus, to keep the Palm way of PDA a standard in the future?' is a big challenge that the company is facing today. EXTERNAL ENVIRONNEMENT OF PALM Inc. The industrial organization model suggests that above-average returns for any firm are largely determined by characteristics outside the firm. [...]
[...] Microsoft and Psion remain far behind Palm Inc, which possesses 84% shares of the PDA OS market with its Palm OS. Nevertheless, they both have strong commitments regarding high-tech blue chips. Psion offers EPOC OS through its venture with Ericsson, Nokia, Motorola and Matsushita: Symbian Ltd, whereas Microsoft is supported by Compaq, Casio & Hewlett Packard. If Windows CE and EPOC represent together less than 25% shares of the global market, they are actually positioned on different start lines depending on how the market will change. [...]
[...] Innovation Resource - Simply Palm Design Philosophy ‘Simple', ‘Wearable' and ‘Connected' are the core components of the Palm's design philosophy; it performs quite well to meet customers' expectation and create real value to them. Reputation Resource - Brand Name and Reputation within Customers The No.1 position in the U.S., UK, Europe, Asia Pacific and Latin America built on the strength of the Palm OS®. As the PDA market leader, with the product design focusing on the customers' concern and expectations, as well as with a large range of PDA models, the Palm has won the consumer's preference and loyalty. [...]
[...] However, since the brand is so strong that retailers cannot refuse to stock Palm products in their stores. But the company should keep in mind that it is not a monopolist and retailers are probably too strong to go to war with. Palm can sell its products over the Internet, but it should maintain the same price as in the super markets. To focus exclusively on OS The strong rivalry in the market for PDAs decreases the profitability of Palm. [...]
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