If you answered 'D', You're Not Alone: A Hand-Held Revolution Is Afoot

Paramedics said the patient being wheeled into a Boston emergency room last week was suffering from a potentially lethal heart condition, but Steven K. Epstein wasn't so sure. The electrocardiogram was cryptic, and Epstein, the attending physician, knew he'd need a little help.

Instead of dispatching an intern to pore through a textbook or waiting for a specialist to arrive, Epstein reached into his pocket for a device that's become as useful to him as a stethoscope: His Palm V hand-held computer.

With a few taps of the unit's stylus on its card-sized screen, Epstein pulled up a brief summary from a medical database. "I looked at my Palm and then at the EKG and I said, 'This person is not having a heart attack,' " said Epstein, who works at Beth Israel Deaconess Medical Center in Boston. "And I never had to leave the patient's side."

Chalk up another gee-whiz story for the Palm, alongside tales of people using it to read an electronic version of Monica Lewinsky's book, to translate phrases into German when visiting Frankfurt, to trade stocks using a wireless modem, to count calories when dieting, to track the NASCAR racing schedule and to search the Bible.

Unveiled in 1996 as a portable organizer that would store your address book, calendar and to-do list, the gunmetal-gray Palm computers quickly became the ultimate geek gadget--the pocket protector of the '90s.

But now, like so many other developments in the technology world whose "early adopters" were members of the nerd class--the Internet, personal computers, hand-held calculators and pagers--the Palm is going mainstream. Doctors. Lawyers. Real estate agents. Soccer moms. They all seem to want one. And suddenly, the Palm has found itself on the verge of becoming the first mass-market hand-held computer.

Unlike many machines of similar size, the Palm's utility isn't limited to being a digital replacement for a Filofax. It's a genuine "computing platform," which means that businesses and hobbyists can create and distribute their own software for it-- and they have done so with gusto.

Today, there are more than 5,000 software applications for the Palm, ranging from the quixotic to the prosaic. There's Scrabble and Tiger Woods Golf. One program will let you download Web pages and scan them when on the Metro. Another will allow you to log your expenses while traveling and dump the data into the Quicken personal finance program when you get back home. And several will help improve the basic address-storage function.

That flexibility has been been a big draw. The device's manufacturer, Palm Computing Inc., a division of networking products firm 3Com Corp., has sold more than 3 million units since the flagship "Palm Pilot" was introduced, a figure analysts expect to double by the middle of next year.

A big part of that increase, the company hopes, will comes from sales of the newest Palm, the VII. The $599 device has a cellular-phone-like antenna on its side, and when flipped up, allows the user to wirelessly send electronic mail, get stock quotes from online brokerage E-Trade, read news headlines from USA Today, buy movie tickets through MovieFone, get driving directions from MapQuest and engage in a host of other online activities.

3Com's ambitions are simple: It wants the Palm operating system to be as common in the hand-held world as Microsoft Corp.'s Windows software is on the desktop. The firm has a grand vision of a "Palm Economy" where software firms will find new businesses in selling programs for the devices, where corporations will use them to track inventory in the stockroom and where other companies will create Palm "clones" to help expand the hand-held market. Palms, some enthusiasts hope, will revolutionize computing in much the same way that cell phones changed the telephone world.

"This is a whole new industry that's just taking its first steps," said Robin Abrams, Palm Computing's president. "There's going to be a whole world of applications and products that we just can't imagine today."

Analysts estimate that the Palm Economy will generate more than $1.5 billion in revenue this year, about half of which will come from 3Com's sale of the hardware, which range from about $249 for the low-end Palm III to $449 for the svelte Palm V.

But Palm's vision isn't without obstacles. Microsoft is aggressively promoting a rival operating system called Windows CE and has persuaded several global brand companies to use it in their new hand-held products, among them Compaq Computer Corp., Philips Electronics NV, Hewlett-Packard Co. and Casio Inc. Some of the Windows CE units have color screens (the Palm's are monochrome), and all of them can run stripped-down versions of Microsoft's popular Word and Excel programs, making it easier for users to copy files from their desktop to their palmtop.

The wireless Palm VII also will face competition from cell-phone giants Nokia OY, Ericsson AB and Motorola Inc., which are funding a joint venture in England called Symbian that's creating an rival software platform for a new generation of phones geared for two-way data transmission.

Palm's biggest competitor, however, may be human nature. It needs to wean millions of people from their trusty paper calendars, address books and Post-It note reminder lists. And after it does, it has to keep them using the device. Nowadays, scores of customers dump their units in a drawer after a few weeks, finding "Graffiti," the stylized alphabet users must learn in order to input data, too complex.

Despite the skittishness from some quarters, industry analysts expect the hand-held market to continue booming. International Data Corp., a market research firm, estimates that overall hand-held sales will grow from 2.4 million units this year to 6.2 million in 2003, although the products will have a smaller piece of a bigger pie. Between now and then, IDC predicts that Palm's share will fall from almost 80 percent to 54 percent.

Nevertheless, said IDC analyst Jill House, "Palm looks like its going to be the leader in this market for a while."

When Jeff Hawkins and Donna Dubinsky started Palm Computing in 1992, hopes for the hand-held market were high indeed. Apple Computer Inc. was about to introduce its much-awaited Newton personal digital assistant, developed at a cost of $500 million. But when the Newton appeared the following year, it ran straight into trouble.

Apple had tried to pack too much into the device--full-scale handwriting recognition, for instance--and wound up with a dud. Other attempts fared no better. Go Corp.'s PenPoint device and an early attempt by Microsoft, called Pen Windows, tanked almost as soon as they arrived on the market.

Palm kept at it, though. It had originally intended to supply software to Casio Computer Co. for its Zoomer device, but when that failed as well, Hawkins had an epiphany. People didn't want a big, complex digital assistant that replaced their computers, but a small, simple device that did a few things well.

Hawkins began work on a new type of device, literally carving the first prototype out of a wood block. In 1995, he and Dubinsky had a prototype but little money to continue their development work. Finally, after striking out with venture capitalists who had seen the carnage from previous hand-held efforts, U.S. Robotics Corp., the modem giant, decided to acquire Palm Computing for $44 million.

The following year, U.S. Robotics released the first Palm Pilot. It was tiny. It did a few basic tasks. And it became wildly popular. In its first 18 months, more than 1 million units were sold, a more successful debut than the Sony Walkman, the Nintendo GameBoy or the Apple PowerBook.

No matter that Graffiti wasn't that easy to master or that there were scores of devices on the market that functioned as electronic calendars and address books. Users loved the ability to slide their Palm into their shirt pockets or its holder on their desktop and, with the press of a button, "sync" it with their personal computer, updating their address book, calendar and to-do list.

Despite its success, the Palm was still a small part of U.S. Robotics' business. And when 3Com acquired U.S. Robotics in 1997 for its modem business, the Palm division found itself as a small island in 3Com's sea of networking products.

But seeing the growing popularity of the Palm, 3Com eventually decided to give the division greater autonomy--a sort-of Saturn-within-General Motors concept--setting it up in a separate building and allowing it to market its products independently of 3Com's routers, hubs and switches.

After Hawkins and Dubinsky left last year to start a firm that will develop Palm-based software, 3Com tapped Abrams, a former executive at Hewlett-Packard Co. and Apple, to run the division. An animated, aggressive leader, Abrams now talked about such things as the "Zen of Palm."

Over dinner near 3Com's San Jose headquarters, she held up a Palm V (she brought three different Palms to the table) and asked, "How do you put a mountain in a teacup?"

The failings of other hand-held computers aren't ever far from the minds of Abrams and her lieutenants. No stranger to the history of Apple--which wowed the world with its technology but lost its market lead after refusing to permit clones and failing to encourage enough software developers to support its platform--Abrams is taking a decidedly different tack.

The company is actively encouraging software firms to develop stripped-down programs for the Palm. It has recruited International Business Machines Corp. and Symbol Technologies Inc. to sell Palms to businesses. IBM is selling Palm clones, and a few other as-yet-unannounced firms are working on them. 3Com also has licensed the Palm technology to Qualcomm Inc. to use in its new PDQ wireless phone.

Although almost every Palm sold today is made by 3Com, Abrams said she would settle for half that in a robust market with several clones all supporting the Palm operating system, or "platform."

"At the end of the day this is a platform play, and market share is really important to us," she said.

The firm also is hoping that its operating system, which is designed exclusively for hand-held devices, will have a leg up on Windows CE, which is designed to run on a variety of electronic devices, including television set-top boxes and telephones. Windows CE has been criticized by some reviewers as too slow and cumbersome--and not customized enough--for palmtop computing.

"We're not performing unnatural acts. We're not trying to force ourselves onto toasters," said Mark Berkow, a Palm vice president. "Microsoft is really trying to be something to everybody. I'm happy to concede the toaster market."

Abrams calls one's Palm "a very personal space" where people don't want to be duplicating the functions of a personal computer. That means no word processing or tinkering with spreadsheets, or even the ability to send lengthy e-mail messages. "It's really about the instant access of discrete information," she said.

But the rival Windows products do have advantages--color screens, compatibility with Microsoft desktop software and a greater variety of product offerings. Although industry analysts understand Palm's reasons for staying monochrome--color zaps batteries and isn't necessary for most on-the-go applications--they wonder whether consumers will be turned off when they compare models in the store.

"There could be a perceived lack of keeping up with the Joneses technologically," said House, the IDC analyst.

Palm also will face new challenges this year as it tries to convince people that the wireless Palm VII is worth $599--and at least $9.95 in monthly network access charges. Unveiled last week, the device has been panned by some reviewers for being too slow and too costly for the average consumer and not including the ability to browse the Web.

The VII only allows users to access Internet content that has been specially configured for the device by a few dozen Palm content partners. With ABC News, for instance, you don't get any of the photos or graphics that are available on the Web site, just headlines and brief stories.

The device doesn't connect directly to the Internet. It uses a two-way nationwide paging network operated by BellSouth Corp. to transmit data between the user and 3Com's computer center in San Jose. From there, 3Com connects to its content partners to get the information the user is seeking.

In two weeks of testing by a reporter, the VII was both lightning quick and painfully slow. Over dinner one night at a downtown Washington steakhouse, the unit was able to get the up-to-the-second score of a New York-Atlanta NBA playoff game before a dining companion even made it to the bar to glance at a television set. On other occasions, however, it took more than 30 seconds to check a stock quote on the E-Trade site.

3Com acknowledges that there can be broad variations in data speed, but the company says the average wait is four to five seconds, which, they note, is still faster than any other means of accessing e-mail or news while walking down the street.

The VII currently is only available in the New York metropolitan area. 3Com wants to ensure that its data network can handle a modest amount of traffic before they offer the service nationwide, which they expect to do later this year.

Analysts predict the wireless version could take the Palm market in two directions, attracting a new group of users who are primarily interested in mobile communications but who have little interest in the Palm's traditional organizational functions.

And then there are the Palm faithful--people such as the emergency-room doctor, Epstein, who love the fact that they can carry reams of data in a shirt pocket. He recently added more memory to his Palm V so that it could accommodate his entire medical database, which includes summaries of 170 scientific journal articles.

When a fellow doctor wants a bit of data from Epstein, he just points the infrared transmitter from his unit toward his colleague's. (He has persuaded half the staff in the Beth Israel emergency room to get Palms.)

"This is just an incredible tool," he gushes. "I don't know what I'd do without it."

Progression of the Palms

All models of the Palm hand-held computer, manufactured by 3Com Corp., have the same operating system -- Palm OS 3.1. They all include the same software as well: address book, datebook, to-do list, memo pad, e-mail, expense log, calculator.

Model; Cost* List price/Discount price; Memory (megabytes); Buzz

Palm III; $249/$167.95; 2; The first model to come with an infrared port. But has a dim screen, is an awkward three-quarters of an inch thick and has a gray plastic case.

Palm IIIx; $369/$249.99; 4; Looks like the III but has a much sharper screen than previous models. With four megabytes of memory, this one is the data pickup truck of the Palm family. Expandable and customizable with hardware enhancements; more durable than previous models.

Palm V; $449/$343.99; 2; Thinner and lighter than the other Palms and has a cool anodized aluminum case. Features a sharp screen and a rechargeable battery that lasts for weeks. But no official way to expand memory without voiding warranty. Expensive.

Palm VII; $599**/***; 2; The latest Palm, and the first to feature wireless Web access. Available for sale right now only in New York and environs but works nationwide. Same thickness and plastic case as Palm IIIx. Expensive.

*Discount prices found on the Internet; lower prices may be available.

**Plus $9.95 minimum monthly network access charge

***No discount price found.

SOURCES: 3Com, Price Scan

Some Major Palm Competitors

Name; Cost* List price/Discount price; Operating system; Maker; Memory (megabytes); Buzz

DaVinci; $149.99/$99.99; Proprietary system; Royal; 2; Went on the market last month; has phone book, memo pad, calendar, calculator,

handwriting recognition; does not include e-mail, fax or infrared.

Cassiopeia E15; $399/$330; Windows CE (version 2.11); Casio; 16; Smaller than previous Casios, but it's still too heavy and thick to carry in a breast pocket. Because the Casio has a jack for a standard music headset, and room to store music clips on flash memory cards, it can double as a Walkman.

Siena Series 5; $499/$368.95; Proprietary system; Psion; 8; Has a pen for on-screen navigation, mini-keyboard for data entry. Runs word processors and spreadsheets. Includes infrared "beaming" to other devices.

PV-200; $99/**; Proprietary system by Casio; Casio; 2; Has a scheduler, calendar, memo calculator, game. Has back-light display;

also available in French, Spanish, German and Italian.

*Discount prices found on the Internet; lower prices may be available.

**No discount price found.

SOURCES: The companies

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