InfoSync World is trying to analyse why PalmOne is loosing ground worldwide against Microsoft Pocket PC and, at a smaller scale, Symbian, despite its very popular Treo line:

The Palm OS market seems to be something of a contradiction of late. palmOne and PalmSource are in the black. palmOne has the top selling handheld and top selling communicator in the world in their lineup. Yet worldwide marketshare is down to the point that Palm OS was not the top selling platform last quarter for the first time ever.

As always, the devil is in the details. The entry handheld market has always been palmOne's strongest territory, with the low-end Tungsten E now dominating handheld sales by wide margins. The communicator market is still very new but palmOne's Treo 600 is still the most widely sold communicator, and last quarter accounted for 50% of the company's revenue.

The catch is the ever-important high-end handheld market. This used to be palmOne's turf, but as Windows Mobile handhelds have finally come down to the $300-$500 USD range it's changing. That has cut into an area that is lower-margin but more important in the long run. Meanwhile, dark horse RIM has exploded out of seemingly nowhere to take the #3 spot worldwide. Most of its sales are to business people wooed by RIM's email solution, one of the most important markets.

Besides the lost sales that have allowed HP to overtake palmOne in Europe, high-end buyers are very important; they are influencers. They're enthusiasts and executives wanting the new shiny. Those people then convince businesses to standardize on what the boss has. Every sale to a business-influential person is a likely 100 sales after it. Yet enthusiasts circles have been panning palmOne's new Tungsten T5 and to an extent the Treo 650 for not being as glitzy and swiss-army-knife as they wanted it to be. Few people may need margin-hurting features like Wi-Fi, but high-end buyers want them anyway. The fact that the T5 was marketed as the next Tungsten T3, even though it isn't, didn't help.

With PCs, the IBM logo sold better than the Apple logo because IBM was IBM, so businesses bought it, so families bought it. Now, "Microsoft" carries more weight in boardrooms than "palmOne", and "RIM" has managed to make itself synonymous with "e-mail". Despite its talk, palmOne has never had as strong a business push as they'd like to believe. The Treo line is slowly changing that, but it still doesn't say "Microsoft" on it. It supports virtually every e-mail solution in existence... except RIM's. Name sells.

Rumors now circulate that palmOne is considering making Windows Mobile or even Linux-based devices. Of course, "considering" is marketspeak for anything from "someone joked about it at a meeting" to "it will ship Tuesday", so who knows. Meanwhile, while palmOne's individual devices may all be selling well in their respective markets (the top five handhelds in the US are all from palmOne), the shear number of Windows Mobile and RIM devices hides their true success with one of the most important markets.

So far, palmOne's response has been a drive toward the Treo and communicators, gambling that WAN-connectivity will be more important than LAN connectivity. That will require lower-cost devices to succeed, however, and still leaves a hole for influencers looking for a Christmas toy to then sell on their company. The company's other advantage is Central and South America, where the market is still fresh and many agencies, particularly governments, have been increasingly wary of buying anything from Microsoft due to monopoly licensing and cost issues. Will palmOne be able to capitalize on that? I guess we'll find out.

Source: InfoSync World