Listening to Microsoft and Palm knock down each other's products is like watching two of a school's biggest bullies fight on the playground.
The two companies are established in their respective markets and are wandering onto new turf in developing converged personal digital assistant and cell phone products. That there is no clear-cut favorite makes it a great fight to watch.
In one corner is Microsoft (MSFT), which dominates the PC market. Then there's Palm (PALM), which analysts say controls close to 80 percent of the PDA market.
Both companies are battling for dominance over the burgeoning PDA-cell phone business.
"Microsoft is in a good position because people know about it through Windows," said Patrick Aronson, director of business development for comparison-shopping site Cellmania.com. "If you compare the size of the PDA market to the cellular phone market -- you can't compare apples and oranges. So although Palm has the PDA market, most of the world has not yet moved to PDAs. But a lot of them are using PCs and chances are they are using Microsoft on their PCs.
But Palm's edge, Aronson says, is that it has "nice, clean synchronization."
Palm also has more business allies in the field: It has snapped up more phone manufacturers to carry its software than Microsoft.
The top two cell phone manufacturers –- Nokia (NOK) and Motorola (MOT) –- plan to release PDA smartphones that run on the Palm OS by next year. Kyocera Wireless just released a much-awaited PDA phone powered by the Palm OS.
"Palm has a 70 percent market share and 5,000-plus applications," Kyocera spokesman Rick Goetter said.
Microsoft has scored partnerships with Sendo, Mitsubishi and Samsung, but no phone running on its Stinger software will come out until the end of the year.
"Samsung is their biggest (partner)," Aronson said. "I think Microsoft was desperately looking for major players. Ericsson, Nokia and Motorola are afraid (to partner with them) because they could hand their businesses to them at the end like the PC companies did."
Not surprisingly, Microsoft denies it's trailing Palm in the race to strike deals.
"We're doing more than taking a Pocket PC and sticking a phone on it," said Microsoft product manager Ed Suwanjindar. "Stinger has been designed from the ground up to be a good phone and a good PDA.
"Palm ... they've taken a phone and PDA and stuck them together. In the handheld market, phones are a totally different game. The phone market is up for grabs as far as we're concerned."
Suwanjindar said the first Stinger product -- most likely a Sendo Z100 multimedia phone that weighs 3.4 ounces –- is integrated and designed better than smartphones running on the Palm OS. Stinger also doesn't require a stylus to input data.
Palm developer Ted Ladd expressed doubt that Microsoft will deliver on its Stinger promises.
"It's hard for me to comment on what the Stinger will do," Ladd said. "I am not willing to make a comparison (to Palm products) based on (Microsoft's) marketing material.
"They pre-announce a product, but (usually) deliver something that's slightly different. Look at Windows: They produce something that is slower, less reliable, more expensive and delayed."
Both Microsoft and Palm disregard Symbian –- creator of the software running in Ericsson's R380 -– as a formidable competition. Symbian, a Redwood City, Calif., company that touts the financial support of Ericsson, Motorola, Nokia and Psion, has no exclusive contracts with these companies.
In fact, Ericsson, whose R380 has failed to pique the interest of carriers, has not ruled out working with Symbian's competitors.
"We don't exclude other possibilities in the future," Ericsson spokeswoman Rosemary Ravinal said.
"My conclusion of Symbian is it has sophisticated technology that makes for a good demo, but does not work with users," Ladd said. "Something as simple as file management, you have to dig for it. It's not the regular Palm launcher we all know and love."
Symbian, of course disagrees.
"We have a flexible platform," Symbian spokesman Paul Cockerton said in an interview from his R380 in London.
Cockerton added the R380 is intuitive to use and the only device he carries to make phone calls, keep his appointments –- even wake him in the morning. "I'm an intensive user, not a gadget geek," he said.
What do analysts make of the mudslinging? They say it comes down to price point, much more than style.
"Five-hundred dollars is half the price you pay for a PC today," said Neerav Berry, vice president of marketing for Cellmania.com. "It's quite steep."
The R380 sells for $600 on Ericsson's website. Kyocera's newly released 6035 sells for $500 with a Verizon Wireless service plan. Microsoft's Suwanjindar said phones that carry Stinger would most likely fetch for $250 to $400 with service plans.
That is, if carriers sell them.
