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Palm fuzzes on colour, hides behind IPO smoke screen

But underneath the pre-IPO silence, the cupboard looks bare

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Analysis Coming less than a week after Palm commenced pre-nuptials with Symbian, and Nokia in particular, you'd have thought that Palm executives wouldn't arrive empty handed at their annual PalmSource conference. But instead they've come over all coy. Since we now know that 3Com and Symbian have been talking for the best part of a year, you'd suppose that some kind of red meat would have been cut ready to throw at Palm ISVs, along with an explanation of just how they're going to tie the knot. More of that in a tad - but if you're feeling nervous about Palm's IPO, don't read beyond the next few paragraphs. But first, thanks to our American friends who felt moved enough to write to us rubbishing CNet's prediction that colour Palms would appear in the New Year. "I was in the room, and he didn't say that" says one. In fact Palm seemed even more at pains than usual to stress that it prized the monochrome Palm's battery life and performance. Colour has done as much to cripple Microsoft's Windows CE as it has to help it, after all. And perhaps more revealingly Palm reckons that hardly any applications will look better for it. The clincher for us is that since there are no plans to lift the fixed 160x160 screen resolution - for Palm themselves, let alone their licensees - until the EPOC'd PalmOS version 4 (wait, wait...) they've probably sealed themselves in on that count. So it looks like CNet, having caught wind of both the upgraded Dragonball processor which will support colour, and the colour support due in the OS at that time, wilfully misheard. Of course Palm could be leading everyone a merry dance, but given the state of the current technology the smart money must be on Palm letting one of its licensees take the fall for a colour clunker, leaving the Palm brand unsullied. But back to the gripes. We're told that the Q&A sessions had plenty of Qs but no As - and our moles were pretty livid about the fact. We couldn't help noticing that Palm's official explanation - on offer to anyone who would listen last week - is that Nokia will use the EPOC kernel. Kernels can be dropped in, reckons Palm, and kernels can be dropped out. (Palm uses a kernel licensed five years ago from Kadar). Taken at face value this stretches the dictionary definition of 'kernel' way beyond what might be considered decent -and certainly beyond what common-sense suggests in this case. It's becoming clunkingly obvious that Palm's own comms cupboard post-IPO is pretty bare, and it's going to be leaning on EPOC for pretty much everything other than the GUI and Graffiti input. But Palm knows that this is a very bad time to admit it. How so? For a start, EPOC's TCP/IP is pretty low level, but certainly not kernel mode, and relies on EPOC's baroque but essentially watertight resource architecture. OK, so the IP is Symbian's. And having wasted so much time on the albatross of web-clipping, it's going to be borrowing Epoc's WAP libraries too. In fact, it's an EPOC phone with the Palm UI in place of the Symbian EIKON layer: Nokia sensibly is 'licensing' PalmOS in the same way most of us 'license' ale. Back to our developer friends - "The PalmOS IP stack stinks - it's good fortune if it works. We know it's going overboard, but there's no indication of what new APIs will appear or when." Developers won't know until late 2000/early 2001 it seems, by which time they'll be trailing native Symbian ISVs by nigh-on three years. Version 3.3 went out this week and 3.5-based devices are due next Spring, so there's plenty of work to be undone. This also appears to be undoing a lot of the goodwill from IHVs. Given the lack of direction we're not surprised the ISVs are whinging - but Palm's get-out - execs were claiming a pre-IPO vow of silence this week - is half the trouble. They're stretching the truth here, if not being blatantly dishonest. Can it get worse? It can. Palm has taken the step of letting licensees undercut it for value (TRG and Handspring) and expandability (Handspring again), at the cost, of course, of cutting itself off from creating lucrative volume and high-margin segments. A 'Palm Industrial' and 'Palm Expandable' (read bolt-on consumer gadgets) would surely have made far more sense. After all, market leaders don't usually need to license, and Palm is so far ahead it could surely afford to turn the screw. On top of all that, it only takes Wall Street to take a closer look at PalmOS and discover that very little of it will be at all usable in two years time for the IPO valuation to come clattering down. So there's your reason for Palm executives keeping quiet - they just think we haven't noticed… Register stock tip: save your money instead for Handspring's IPO (no, it's not been announced yet). ®

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