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Analysis Apple's Steve Jobs must be now be really pissed off that 3Com CEO Eric Benhamou wouldn't sell him Palm Computing when he offered to buy it. How come? Well, last week, while the PC industry was focusing its attention on Comdex, its annual shindig, held in Las Vegas, a deal between Palm and Sony slipped quietly by, barely registering with the gathered geeks and the world's IT media. They were too busy listening to Microsoft's Bill Gates predict a glorious future for PC technology -- and Sun's Scott McNealy declare the future holds the exact opposite. McNealy's probably closer to the mark than Gates, and the Sony/Palm tie-in proves it. Actually, Gates probably realises it too, but we'll come back to Microsoft in a moment or two. The deal between Sony and Palm centres on the consumer electronics giant's licensing of the Palm platform for a series of devices of its own. And we're not just talking rebadged Palm IIIs here -- Sony said it has in mind a whole range of gadgets designed for a variety of mobile communications applications. Sony will also develop PalmOS support for some of its key media technologies, such as its Memory Stick 'solid-state floppy disk' would-be standard, and, interestingly, these will then become part of the standard Palm platform and so made available to all Palm licensees (and, as a likely Palm licensee, that would include Apple). Now, had any other consumer electronics company signed the deal, it would have been another feather in Palm's cap -- and another snook cocked at Microsoft's rival platform, Windows CE -- but wouldn't have had much wider significance. The fact it's Sony, means we have to look at the deal in a whole new light -- that of the company's plan to dominate information access in the 21st Century. Yes, that is Microsoft's plan, too. Sony, unlike almost every other consumer electronics operation and most PC companies, really does get the old 'digital convergence' concept, and actually has a strategy in place to take capitalise upon it. In fact, it's plan goes further: Sony wants to control that convergence. It has seen the way Microsoft dominated the PC industry simply by controlling its key component -- the operating system -- and it reckons it can do the same thing in the broader world of converged consumer electronics, computing and digital media in a similar way. Here's how it works. Sony's vision of the not-too-distant future has the Net becoming the key delivery mechanism for all our entertainment and information needs. Once everything is digital, you only need a single, broadband network to deliver it, whether that network is a physical mess of cables, or beamed over a satellite link or a wireless connection -- or a mix of all three. In the home -- and the home is Sony's way into all of this -- we'll have our TV, VCR, hi-fi, games console, PC and now, thanks to the Palm deal, personal electronic organiser, all hooked up to each other and to the wider Net, just like something out of a William Gibson story. Sony's scheme is not to control the infrastructure but to define how it all fits together and dominate by setting the pattern everyone else will have to follow, and by getting there first. Come 2001, Sony will begin offering online distribution of movies, music and games, all pumped into the home through the PlayStation 2, which will ship in Japan next March and everywhere else by late 2000. The PlayStation 2 will hook up to other home entertainment systems through iLink (Sony's name for IEEE 1394, better known to Mac users as FireWire), which will soon operate over wireless links as well as physical ones. What makes all this work is a Sony-led standard called the Home Audio-Visual Interface (Havi), a Java-derived (which is where Scott McNealy's Sun comes into the equation) system that allows devices to communicate and interoperate. It also provides for remote access to those devices using not only standard point-and-click remote controls, but more sophisticated GUI-based devices, such as PCs and, more importantly, since you want to be able to get the living room hi-fi loading up your favourite tunes while you're coming in from work, PDAs. Begin to see where the Palm deal fits in here? The Palm platform is unlikely to become a part of the Havi spec., but that fact that's what Sony is using it for and that anyone can get access to the same technology simply by licensing the PalmOS will make it the obvious choice for any other vendor who wants to sell kit that's compatible with SonyWorld ™. Palm always wanted its platform to something more than the basis for a line of organisers, and thanks to Sony, it's dream is coming true. As I've said, more support for the PalmOS means less support for Windows CE. That's good for Sony, because the only company with a comparable gameplan to its own is Microsoft. Gates and co. sees the future in much the same way as Sony does. Like Sony, Microsoft is keenly developing media delivery and anti-piracy technologies. Like Sony, Microsoft is taking stakes in wireless and broadband network companies, such as cellphone networks and, in the UK in particular, cable TV operations. Bill Gates is a major investor in Teledesic, the satellite-based broadband network company. The only difference between Sony and Microsoft is that the latter sees the PC, not the PlayStation, as the heart of the networked home. Rather, its sees any Windows-based system there -- which is why, Gates' Comdex keynote didn't focus solely on Windows 2000, but brought in a variety of CE-based devices and, more importantly, Microsoft has been running around a lot of late trying to whip up support for a possible Windows-based PlayStation 2 clone, codenamed X-Box. Not so long ago, Steve Jobs -- to bring Apple back into the debate -- admitted to a MacWorld Expo audience that Microsoft had won the PC OS war. He was right, largely because for all his faults, Jobs is a smart guy and sees the way the world is turning. Earlier this year he said he wants Apple to become more like Sony, a wise move since it's now Sony, not Apple, that's Microsoft's main rival. Had he been able to buy Palm when he wanted to, Jobs might have bought the two companies even closer together. And he might yet do so. As the battle lines between Microsoft and Sony become more clearly defined, the Japanese giant might well reconsider its support for Windows through the Vaio range. It's not daft enough to tear up its Windows licence while the Microsoft OS dominates the PC OS world, a lead that's likely to remain -- pace Linux -- for the foreseeable future, but we can always hope that it might take a shine to an alternative such as the MacOS. Unlikely, it's true, but you never know... ®

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