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Uphill battle faces Palm Computing's new software offshoot

Forecasting a wireless, liberated future, Palm is switching processors. It's been done before, when Apple dropped the Motorola chip for the PowerPC processor; but this time, Palm faces a harder task in switching "engines" in its pocket machines

Very late, a new software company has been launched, or spun off, from Palm, with the job of launching the next operating system for the pioneer Personal Digital Assistant (PDA) - version 5.0. The new company, PalmSource Inc, will oversee the switch from Motorola DragonBall processors, to ARM chips.

Will this be in time? The hype from David Nagel, president and ceo of the new subsidiary, was warm: "Only the limits of our imagination will hold us back," he said.

There are reasons for optimism, certainly. The precedent is encouraging: when Apple migrated all its software onto the PowerMac in the mid-90s, it was using a very similar chip - a Motorola 68000 family processor. It moved users onto the IBM-designed PowerPC chip - a reduced instruction set computer.

The current Palm processor is based on the same Motorola 68000 architecture; and the new ARM chip is a reduced instruction set computer. So that part of the shift is seen as "known technology" and has the potential to go well.

Where Nagel's optimism is less clearly justified, is where he forecasts a wireless future for all. The Palm is, today, the market leader in its field; but although Palm devices outsell all rivals, they are a tiny fraction of the number of mobile phones in existence - all using a similar ARM processor. And virtually none of those phones uses Palm OS software of any sort.

Also, the Palm OS needs updating. Sales of PocketPC devices have rocketed, since IT managers in large corporations discovered that they came with ready-installed local network clients, while the Palm devices needed to have additional software downloaded.

The gap has been filled already; but there are several alternatives from several suppliers, and no guaranteed standard for easy support by central IT staff.

If Nagel was able to announce his new OS today, he'd still face a scramble to get back those users; but version 5.0 doesn't ship till June or July at the earliest.

It's easy to make excuses for Palm; the company lost its founders when it was swallowed up by US Robotics, which in turn was absorbed by 3Com, which spent years wondering what on earth to do with this odd little subsidiary it inherited, before pushing it out into the wide world. It has, in short, been directionless.

That has to stop, quickly; and it has to be ended by more than just warm words of optimism. We'll be able to judge how effective Nagel can be in a year. The question is, does he have a year to play with?