Don’t Look to Market Leaders for Real Innovation

by Reads (53,085)

A few weeks ago, we all got a sneak peek at HP’s plans for its iPAQ line. While these appear to be solid machines, none of them are particularly cutting edge. What is going to be HP’s most high-end model, the hx4700, is almost identical to the Toshiba e800 which came out last fall. I read quite a few people asking, “Where’s the innovation?”

I hate to be the bearer of bad news, but the companies that are the market leaders are rarely innovators because they don’t have to be. Only when a company is trying to break into a market is it willing to take risks and make products that break the mold.

Let’s take Sony for example. At the time the Palm Vx was the hottest handheld around, Sony introduced the first Clie models, which offered features similar to the Palm model. People stayed away from the Clies in droves because, given a choice between almost identical products, your average buyer would rather get the one from the market leader.

So Sony began to offer features Palm’s handhelds didn’t, like higher-resolution screens and audio players. Sony’s share of the market quickly began to grow.

But innovation doesn’t come cheap. It costs a lot to develop cutting-edge handhelds. It is also risky. Companies can sink a lot of money into creating a new model, and if it doesn’t sell well, much of that money goes down the drain.

When a company is the market leader, it’s a lot cheaper and safer to put out conservative products, especially when these companies know their strong brands will help sell their handhelds.

This isn’t just true of HP. palmOne always trailed Sony in innovation. The Tungsten T3 was the first model the company had come out with in years that offered something that Sony hadn’t had first.

Look Farther Afield

So if you want a cutting edge handheld, what you need to do should be obvious: stop waiting around for HP and palmOne to come out with your dream device and start checking out the smaller players in the market.

Although I know it is going to make some of you cringe, the first one I’d suggest you look into is Sharp. The Zaurus line is typically way ahead of anything you can get in a Palm OS or Pocket PC model. Its first VGA clamshell with dual memory card slots came out about two years ago, something no other company has managed yet.

Toshiba has shown itself to be quite innovative in the past, and ASUS and MiTAC have, too.

The thing that should concern PalmSource the most about Sony bailing out of the handheld market is that there is no obvious successor. Tapwave is just too small a company to ever be serious competition for palmOne, and most of the other Palm OS licensees are smart phone makers. It would be bad for PalmSource to return to the days when all the really innovative handhelds were Pocket PCs. It very much needs to find a big-name licensee to take Sony’s place, and this company needs to realize that the way to break into the market is through offering really innovative products.



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