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ZDNet: One thing that's imperative to me in a converged device is the ability to collaborate on Microsoft Office documents. If I was working alone, I could probably change my desktop environment to make my mobile one more efficient. But I collaborate with others and I can't ask them to change. The lack of any built-in ability to do this with the Palm OS when compared to the Pocket PC is a sticking point for me. Nagel: I agree with you, and that's one of the things we just announced. At the bare minimum, out-of-the-box, you should be able to read any document someone sends to you. Now, if I want to edit it and play around with it, or do something other than talk about it, then I should buy the application. So, we're going to start building in support for the native file formats so all those documents can render on the device. ZDNet: Well, if you look at a PocketPC-based device, you can receive Word and Excel documents as email attachments. They can be opened, edited, saved locally on the device, and reattached to an outbound mail. I find this to be far more useful out of the box than just being able to view a document. So, I know it's a matter of personal taste. But, when I think of the ultimate converged device, it needs to integrate well with my software environment, it needs to have a thumbboard, and it needs to have removable batteries.
ZDNet: I think the Hitachi G1000 comes close, but it's not perfect. It's based on PocketPC, so it can handle Word and Excel documents and it has built-in mail and VPN clients. Nagel: Is it a candy-bar form factor, or is it more like a PDA? ZDNet: PDA. In terms of what's already out there, it most closely resembles HP's iPaq. But it has a thumbboard. However, Hitachi neglected to embed a telephone keypad into the thumbboard. That was an oversight. Nagel: I agree. That would have made common sense. ZDNet: It's too big though, which is why I said earlier it might make more sense to break it down into pieces. Maybe the whole thing needs to be ripped apart. Maybe we have one [wide area wireless] radio and one bill that goes with it and then we have all these other devices that share that radio, maybe in your belt buckle or something. Maybe the sharing happens via Bluetooth. This way, when I'm doing the business thing, I can take my PDA or my laptop or even a big voice device with a big battery and share the radio for those, but then when I go to the beach, I can bring a different voice device or have a wireless device in my ear with the dialer on my waterproof wristwatch. So, to the extent that the most successful handhelds are a marriage between good hardware and good software, how much influence do you have over the hardware? Can you walk over to Palm and say "Look fellas, we need to have a talk about your designs?"
Nagel: Yes. I say that metaphorically. Palm and PalmSource are separate companies. I really don't have any control over what they do. Also, we have a fundamentally different design philosophy than most of the other integrated device guys. Certainly, Research in Motion [makers of the BlackBerry], but Microsoft as well with PocketPC. PocketPC has a very well defined reference design, but Microsoft does in effect get on the phone and say you have to do it exactly this way. That's why all PocketPC-based devices more or less look alike. ZDNet: But, on the flip-side, that would make a very predictable target for developers. Nagel: Yes, but you can do that in software too without having all the hardware look alike. If we did that, we would never have something like what Fossil just introduced, which is a Palm-powered wrist watch. (Editor's note: Fossil must be hedging. The company also announced it will be building products around Microsoft's Smart Personal Objects Technology otherwise known as SPOT). So, our strategy, and we'll see if it works or not, has been to encourage people to be innovative and differentiate. You have all these requirements and you have to figure how to do it. But you're right: Some clever industrial designer will. Our view is that some clever licensee will figure out how to make an entertainment device, while others like Handspring will work around or build on top. Those licensees are real proud of where they built on top. That's where they can add value and they hopefully will get some margin points for that. If you're competing only on price and there are no design differences, then you end up with a commodity product and you get back into the PC business. That's something we think should be avoided in this personal electronics space because everybody has a different idea of what they want. I don't want Bill Gates designing my ideal converged device because I don't think he and I think exactly alike in terms of providing value, making tradeoffs, or whatever. If you give people more freedom, then you're likely to see more offerings that addresses more diverse needs and you end up with a wider market. ZDNet: Do you see the different needs of small business and large enterprises as one of those things that defines design? Nagel: Yes. That's why we are standardizing at the software level on a lot of the capabilities, so that the enterprise developer can assume the stuff will be there. We're even providing ways for people to add value in the channel. The architecture is extendable. It's analogous to a browser with plug-ins. We make a standard plug-in interface so that if you don't want to use the VPN we provide, you can use somebody else's VPN.
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