Palm CEO talks tough on MS rivalry

It seems the gloves have come off between leader Palm and Microsoft in the fight for dominance of the handheld computer software market, and Palm’s David Nagel is jabbing.

Palm announced last week that it has completed the split of its operating system (OS) division from the rest of the company, which makes Palm-branded personal digital assistants (PDA), the popular pocket-sized organisers. The software unit will now report separately on the financial performance of its licensing business, and could eventually be spun off or sold by Palm.

The Palm OS, used by the bulk of handheld computers, walks a path blazed by its biggest rival Microsoft, whose Windows operating system drives most of the world’s PCs. Microsoft’s Pocket PC software powers handhelds made by companies such as Hewlett-Packard and Compaq Computer. These are popular with corporate users, known within the industry as ‘the enterprise’, and among people craving a smaller version of the desktop PC. But Nagel, president and chief executive of Palm’s OS group, said Pocket PC devices are far more pricey and plump than users need.

“Frankly, the truth of the matter is that they (Pocket PC devices) are much bigger and more expensive products because the operating system is bloated,” Nagel said in an interview. “It has a lot of stuff that is a holdover from the PC days that simply is not necessary in the enterprise or anywhere else.”

He said Palm enjoys ‘an enormous benefit from having a more compact, more run-time efficient and frankly better operating system.’ His tough talk might seem foolhardy in the face of Microsoft, the 800-pound gorilla known for playing hardball with rivals as well as customers. But Palm, spun off in 2000 from 3Com, can afford to boast, at least for now.

Palm on Monday said the total number of Palm-powered devices sold has now surpassed 20 million worldwide after only about five years. November sales figures from market research firm NPD Intellect showed Palm OS handhelds, including those made by Handspring and Sony, made up some 82 percent of all handhelds sold at retail in the United States, with early indications of another strong showing in December.