Palm developers unite against Microsoft
Kim is a Palm (palm) loyalist. In fact, the 34-year-old programmer loves his two Palm computers so much that he quit his software-development job last year to write applications for Palm devices full time. He also formed a company whose $12.95 Palm program is climbing the sales charts of several online software stores. The application, called SilverScreen, creates flashy icons that help Palm users navigate their handheld organizers.
But what makes Kim so valuable to Palm is his refusal to adapt his program for competing gadgets, in particular devices using Microsoft's (msft) Pocket PC operating system. Some of Palm's rivals -- Kim declines to identify them, citing nondisclosure agreements -- have asked him to write software for them. He declines, he says, because "all the other devices are just trying to copy Palm. Our strength lies in the fact that we've allied ourselves with Palm."
Palm has thousands of partisans like Kim, and they have given it an edge by writing software exclusively for the device originally known as the Palm Pilot. Many of the developers run shoestring operations and sell their wares largely as Web "downloads." But together they provide a critical mass of add-on software that is a compelling reason for some consumers to choose Palms. According to International Data Corp., Palm has an 80 percent share of the handheld computing-device market. (That figure includes the share of a rival, Handspring Inc.'s Visor, which uses the Palm operating system.)
"The main reason I like the Palm now is that there are lots of visual applications, and more and more applications are being made for the Palm," says Vikram Gupta, a management consultant in New York who uses a Palm V.
Officials at Palm -- which is 95 percent owned by 3Com Corp. (coms), which took it public earlier this year -- say they have 70,000 third-party independent developers registered now, up from 3,000 at the start of 1999. Microsoft, by contrast, says it has signed on 200 companies to build applications for the Pocket PC, though many of those companies have dozens of individual developers working on applications. The Pocket PC operating system, which was relaunched in April in a sleeker package, runs on Palm look-alikes made by companies like Hewlett-Packard Co. (hwp) and Compaq Computer Corp. (cpq).
Among Palm's loyal developers are startups like HealtheTech, of Golden, Colo., which has created a diet log for the Palm; Vindigo, of New York, which has produced technology that delivers local maps and event listings for the gadget; and Actioneer, a San Francisco startup that sells a program that sends notes and reminders on the Palm.
Certainly not all of Palm's big market share comes from its armies of add-on writers. Wednesday, it announced the purchase of AnyDay.com (www.anyday.com), a provider of Internet-based calendar solutions, for $80 million in cash and stock options, another step in its race to become the leading wireless handheld computer provider. It also got to market years before its competitors, and many Palm users still buy the device because they want to get the software that comes with it. The machines that use the Microsoft operating system have similar built-in programs. And Microsoft's Holden points out that many Palm-only add-on programs -- such as spreadsheets -- don't represent an edge against Microsoft because the functions are embedded in the Pocket PC.
Not all software developers are going Palm-only, either. Larger companies like Sybase Inc., the database purveyor, are also drawing up software for non-Palm handheld computers. So are smaller developers like Concept Kitchen Inc., a San Francisco startup that has produced a Lonely Planet travel-guide program.
"Microsoft has been very supportive, making sure we have a presence in trade shows," says Steve Organ, marketing director at Concept Kitchen. "So we're supporting the handheld industry as a whole, not just one device."
But at least for now, with new developers signing on at the rate of 2,500 a week, Palm appears to be winning over the bulk of the developer community. "Palm obviously has the momentum," says Jill House, an analyst at International Data Corp. "And having people well-versed in its platform is a definite plus," because that helps customers stay interested in the device.
Palm's role model for the strategy is Microsoft. It hopes its developer community will turn the Palm into the standard for all handheld devices, much as Microsoft's operating system became a standard partly because so many developers created applications for it. Palm executives, including Chief Executive Carl Yankowski, have made expanding the ranks of software developers a priority. Palm holds classes for developers and will unveil a $150 million venture-capital fund that will be used to invest in some developers.
"It was a no-brainer" to develop for Palm, says Kelly Forrister, director of strategic alliances at Actioneer. "Palm has a much stronger developer community, and we get marketing support from Palm. We even get discounts of 35 percent on Palm hardware."
Kim is typical of Palm's developer army. The Stanford University alumnus, who had dabbled in programming since his teenage years in his hometown of Iowa City, branched out on his own after buying his first Palm in June 1999. Enamored of the device, he called up an old high-school buddy, Mark Peters. The pair spotted potential in building software that would liven up the device's interface.
"With Palm, anyone with a good idea has a real chance to make it happen," says Peters, 32, who also runs a moving business on the side. "For other more established tech products, only developers who have a lot of financial backing have the chance to succeed."
Kim, who set up a crude office in a two-bedroom rental in Mountain View, Calif., began developing the SilverScreen program through a flurry of e-mails and phone calls with Peters, who works out of the basement of his Iowa City home.
Palm gave the pair support. The duo regularly raided Palm's Web site for programming information. And late last year, Kim attended a developer meeting on the sprawling Palm campus, where executives pledged to do more to help the company's fledgling developers.
On Jan. 6, the pair uploaded their completed SilverScreen application onto a popular Palm software Web site, PalmGear (www.PalmGear.com). Within four hours, sales began trickling in.
Not long afterward, other handheld device makers began contacting Kim and Peters with requests to develop non-Palm software. But the pair declined. "We really want to focus on one platform," Kim says. Adds Peters, "Palm is in our minds night and day."
Palm's growing population of developers hasn't been trouble free. As the ranks have skyrocketed, so have rumblings that the company is having trouble meeting their needs. Mark Bercow, a Palm vice president, acknowledges there have been some complaints and says Palm is hiring more staff and beefing up its support infrastructure. "The developers are a very important part of our competitive advantage," he says. "We don't want to screw that up."
Indeed, Kim and his partner haven't ruled out someday creating software for other handheld platforms, especially if Palm stumbles. "If Microsoft Pocket PC improved its ease of use, that would philosophically agree with what we do," Kim says.