Roaming Into Corporate Japan

PDA giant Palm Japan tries to penetrate enterprise space.

Last month, we told you that the personal digital assistant (PDA) was poised to steal a larger share of Japan's mobile data market (see "Bit-Sized", November 2001).

In Japan, PDA owners can use PC CardD and Compact FlashDformat data cards to access several mobile carriers' data networks. The data cards interface with an expansion slot in the PDA and can be used on PHS and other networks (at 32 and 64 Kbps) operated by NTT DoCoMo, DDI Pocket, and KDDI/Au.

Japan's network-rich environment means that PDAs are evolving differently here than overseas. US PDA maker Palm has been in Japan since March 2000, and its latest devices, the m500 series, have an adapter allowing the use of DoCoMo or DDI Pocket PHS data cards.

While Palm Japan doesn't make its sales figures public, the company has added staff to its Tokyo office this year and is bullish on the future. Nonetheless, an October ranking of best-selling PDAs by T-Zone, the hyper-popular Akihabara electronics merchant, showed no Palm models in the top 10.

Further, parent company Palm USA has been through a tough year so far; inventory reached high levels, sales were down, and several launches have been delayed. Palm's vice-president for Asia Pacific, Craig Will, says that despite this, Palm USA has seen some market share growth. He also explains that the global slowdown in IT spending has not had zero impact on Palm Japan. "We're not able to spend as many marketing dollars as we like, but it's nothing crazy," he adds.

Many industry watchers expect Palm Japan and other PDA makers to take an increasingly larger share of Japan's enterprise mobile computing market, an area where cellphones have not gained a strong foothold largely because of their limited computing power. Wireless email is a killer service on almost any platform, and is one of the biggest applications for the wireless-enabled Palm VII in the US. "We're pretty focused on that. We see [wireless email] as the next wave," says Will.

Like other PDA makers, Palm Japan is keen to get its devices distributed to large enterprises through the organization's internal information technology (IT) department. Some pundits charge that Pocket PC-based devices, like the Compaq iPaq or the new Toshiba PDA, whose operating systems are provided by Microsoft, have a huge advantage in getting IT managers' attention, since most corporations already deploy Microsoft software.

But Will believes that Palm will remain competitive. "We're seeing more IT departments take note of this technology. Our devices are already in a majority of Fortune 1000 companies, and more and more [of those] companies are creating [technology] standards lists; we lead significantly [on those lists]," he says.

Palm Japan announced a project earlier this year to launch a device with built-in wireless capability similar to the Palm VII. The device would have run over NTT DoCoMo's Do-Pa packet network (the same used for i-mode) at 9.6 Kbps. But the plan was shelved mid-year in favor of the wireless data card approach. While the slow network speed was one concern, another was the limitation that came with having the device transmit on only one carrier's network. "[We] decided there are better networks and capabilities in Japan. 9.6 isn't too bad on a Palm, but we are seeing more need for higher bandwidth capabilities -- for enterprise applications," says Will.

Also, enterprises and consumers tend to want a choice of networks, says Will, and Palm didn't want to be "blocked out when they're looking at wireless handheld devices."

Outside the US, Palm claims to have a 35-40 percent market share. But the company is shooting for 50 percent, and to reach that, says Will, "You need to get bigger in Europe and bigger in Asia." PDA makers -- Japanese and others -- are learning that wireless capability and, more importantly, choice of network, is one key to boosting sales. @