Palm OS 5 - the silver bullet to send Microsoft and Nokia packing? Not quite...

Think of the people that gave us the Palm operating system. Some of you may now collectively call them PalmSource, offspring - along with Palm Solutions Group - of Palm Inc, previously Palm Computing, previously 'that 3Com unit that introduced the PalmPilot'. Whatever. In the big scheme of things they've done pretty well.

From a standing start, the Palm OS team provided the basis for the most popular handheld computer to date. And today, David Nagel, CEO of PalmSource, was in town to say why Palm OS 5 will take his software company to new heights, as licensees such as Handspring, Kyocera, Samsung, Sony and, of course, Hardware Palm - plus a few more who he wouldn't name - bring out new Palm-based devices.

Nagel, you see, thinks two things are key - PalmSource's technology and its business model. As for the former, Palm OS is very efficient, has over a quarter of a million developers and has loads of applications. It is also easy to use.

As for the latter, well, Nagel should know a thing or two. He was head of Mac R&D (hardware and software) around the time when Apple made its biggest mistake - failing to license its hardware designs and OS to third parties in direct contrast to the PC clone business. You know how that panned out.

So why the nagging doubts about PalmSource and the Palm OS? The answer lies in the headline of this piece. When asked what he envies about Microsoft's competing PocketPC OS, Nagel didn't cite a feature or business model. He simply said: "Forty billion dollars."

In other words, Microsoft is a money-in-the-bank wealthy, powerful company that nearly always gets its way. It is also, as Nagel himself admits, filling the role played by IBM in computing 30 years ago - it's the safe choice.

And what of the other main competitor? Symbian is backed by the main mobile phone companies. As yet, it is only in a few phones but watch out as it starts to dominate the smart phone/communicator market. (Remember it even once provoked Gates to call its creator, the UK's Psion, his company's biggest threat, and now Microsoft even has its Smartphone 2002 OS separate to PocketPC.)

Symbian may have a half dozen or so backers but Nokia - the 40 per cent market giant - is its main champion. And what did we say about Microsoft's money in the bank, power in its markets et cetera?

So on one front PalmSource will battle PocketPC, on the other Symbian, with fundamentally the same product. Taking a major chunk of the Chinese market - already worth somewhere between four and seven million units per year - would keep any business going but failure to confirm a deal with Legend and home-grown manufacturers' use of Linux or their own OSes means there are question marks there too.

As with Palm the hardware company, doubts remains more because of the long-term strength of the opposition than current technology weaknesses or market position. And in case you were expecting a review of Palm OS 5 - yes, we rate it, though within the above context.