Enter the Palm

Never mind the red ink on its balance sheet of late. Palm is still by far the biggest palmtop maker in the world. Its simplicity, elegance and Graffiti handwriting recognition has won it millions of hearts and many thousands of software apps. Some 22 million Palm devices have shipped since the first Palm Pilot, apart from another seven million palmtops and smart-phones from Sony, Handspring, et al that have licensed the

PalmOS.

For all that, it’s been nearly invisible in India. Most Indian users of Palm products have bought them abroad. Even though Palm has had Tech Pacific as its India distributor as well as marketing agent since 2001, it has had little success on the sales figures. Okay, so you’d expect the palmtop market here to be tiny, given that even notebooks make up less than 3% of PC sales. Still, it hasn’t helped that there has been little market development activity other than the occasional

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What Palm will do  n Make all models available in India n Dedicate Tech Pacific managers for Palm products n Step up advertising What it needs to do n Reduce prices for India n Work with software companies to create local applications n Focus on business users with specific apps like sales and CRM, channel management, etc n Encourage PalmOS developers n Have special promos to seed palmtops n Sell packages for specific segments such as media (with accessories like the keyboard)

Palm wants to change that now. It’s ramping up marketing and distribution in India, with improved availability of and support for Palm models, and local pricing. “Every product available through the world is available in India,” says Palm’s chief evangelist Paul Leeper, visiting India in October for channel and other meetings.

Palm is not placing its own managers in India, but relying on its distributor Tech Pacific for sales and marketing. However, Palm’s Singapore-based regional sales director Daren Ng said that this would, unlike earlier, involve “dedicated resources” at Tech Pacific, including VP Sanjay Achawal, business manager Manish Lahoti, and a salesperson in each major metro all focused on Palm products.

Palm’s new Zire and Tungsten models launched in India mirror the launches abroad. Though Palm is trying to keep prices ‘attractive’, duties and other costs add up to a 50% overhead against US or global prices. The $99 Zire 21 is Rs 7,500. The camera-enabled $299 Zire 71 is at Rs 22,500. The pro-oriented Tungsten range now includes the Tungsten C, Tungsten T3 and Tungsten E, at Rs 37,500, Rs 29,900 and Rs 14,900 respectively. 

Tech Pacific’s dealers will also sell a range of accessories in India, including folding keyboards and USB sync/charge cables.

Improved support in India includes a new toll-free number, and an India support page planned for the Palm Website soon. 

Palm’s Zire 71 runs off an ARM processor and includes a digital camera and a high-res color screen. But as with other models, at Rs 22,500, it’s over 50% dearer in India, suggesting that travelers will prefer to buy Palms abroad

While Palm has no offerings in the smart phone range barring the TungstenW31, its upcoming acquisition of rival Handspring (to be ratified at Palm’s October 28 shareholder meet) brings in the Treo family of PalmOS based PDA-phones into Palm’s portfolio. 

“While the taxation, certification and other matters get resolved in India, Palm wants to make sure that the Indian buyer is aware that the products are here, and so is the support for them” says Palm’s Australia-based regional marketing manager Lesley McKnight.

A few enterprises such as Air Freight Express couriers, Britannia, Proctor & Gamble and HLL are using dozens of Palms for channel management and other applications. Leeper says the business applications base should get a boost with the recent Java support, with a J2ME engine licensed from IBM.

A global two-year slump in demand helped drive the California-based Palm, Inc into the red. But Palm says corporate demand is now beginning to recover, a positive sign, even though IDC puts enterprise users at only a tenth of Palm’s sales.

Prasanto K Roy with inputs from Nupur Chaturvedi

Counterpoint: What Palm Needs to Do in India

While Palms have been available in India since 2001, it is unfair to blame the lack of sales on low demand. Look at the way the handheld computing market grew globally, and also the way the way the Indian mobile phone market did mirror global growth. 

In my experience, it is difficult to buy Palm products in India. Even in 2003. I was finally forced to buy abroad, after the distributor just flatly told me that he could not sell me a piece, despite stocks in hand. Why? Because, months after its launch, that model was still under TEC approval for its Bluetooth interface. From personal experience I know that TEC approval process takes two weeks if done correctly. If you don’t provide all the information requested, it gets delayed. I tried through February, March and then April before finally buying a Zire 71 abroad.

I believe that if Palm had not put all its eggs in one basket for distribution, availability and prices could have been better earlier. I found advertised phone numbers non-functional, or answered by people clueless about Palms. When I finally tracked down the one person who did know something, I got the run-around for three months before being told that they could not sell me a piece.

The high pricing puts Palm at a serious disadvantage in India–even PocketPC handhelds are cheaper. Duties and taxes compound the problem, but Palm should have considered market realities before fixing such high prices when they are trying to make a mark in India. 

On the awareness front, Palm needs to seriously roll up its sleeves and get to work here–despite efforts by existing Palm users to educate people about the differences between a handheld computer and a digital diary, most people in India still see Palms as expensive digital diaries. 

A prospective buyer is going to do a double-take when he finds he has to pay twice as much for a Palm as for an average Celeron-based PC in India. Even a fully loaded P4/Athlon PC could cost you less than a top-of-the-line Palm handheld. 

While experienced handheld users understand the value of such devices, the general buyer is going to see Palm’s devices as fancy gadgets–especially now that many cellular phones in the Indian market are priced far lower than what Palm is asking for some PDA-like functionality. 

To change this, it is important that Palm needs to spend time and money educating its users, especially the business community. Roadshows explaining the benefits of handheld computing devices would help. 

While even the basic Zire or Zire 21 are good enough to be indispensable tools, the prospective buyers will experience sticker shock unless they really understand the difference between an overpriced Palm handheld and a Rs 900 digital diary. 

It is also important for Palm to differentiate itself from the competition. Few Indian buyers can really tell PocketPC and PalmOS apart, and they’re likely to be led by the “familiarity” of PocketPC (“Windows on a handheld”). Because Palm has never had an awareness campaign in India, it is likely to lag in a market that is more familiar with Linux than

PalmOS! 

Palm also needs to address the developer community. Localized applications in specific verticals would help in quick adoption of Palm’s offerings, especially if it finds adoption by banks, financial institutions and even government agencies. 

Despite its small market share, one technology that Palm is going to repeatedly come up against is the Simputer, which is not perceived as a digital diary but as a computer in India, and is priced far lower than Palm’s offerings. 

Heavy localization, the availability of regionally relevant vertical applications and an established “underdog” image that the Simputer enjoys could put Palm in a situation of some discomfort when it starts addressing similar markets (especially government markets). 

Atul Chitnis 



The author is a technology consultant, a well known handheld computing and Linux evangelist, and a Palm user since 1998. The views expressed are his own and may not reflect those of Dataquest