Acer makes plans for a Palm PDA

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By Stephen Lawson

(IDG) -- The Palm operating system will soon find its way into another personal digital assistant.

Taiwanese PC and electronics device maker Acer will announce Friday that it will license the Palm OS for use in a handheld computer, Acer spokesperson Erica Hao says.

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The company had been reported close to a deal with Palm for licensing of the operating system for a PDA now in development. The company demonstrated at last year's Comdex trade show in Las Vegas a PDA that was based on the Linux operating system.

The deal will make Acer the first Taiwanese company to license the Palm OS, which runs the popular Palm brand, Handspring Visor, and Sony Clie PDAs. In addition to Sony, Japan's Kyocera and South Korean Samsung Electronics are the only other Asian companies that have licensed the Palm OS.

At Comdex last year, Palm was conspicuously absent from PDA demonstrations by Acer and several other Asian vendors, including Taiwan's Mitac International. Acer and Mitac officials said then that Palm had turned down their licensing applications because of concerns about razor-thin margins in the OEM business.

Palm's share of the market for PDA operating systems lags in the Asia-Pacific region (excluding Japan), at 25.5 percent in 2000 versus a worldwide share of 75.9 percent, according to Manny Lopez, personal systems analyst at IDC in Hong Kong. One reason for that discrepancy is mainland China: the company does not yet offer a Chinese-language Palm OS. Most of the popular PDAs in China now use proprietary Chinese-language operating systems.

IDC's Lopez believes the Palm OS could meet Chinese demands better than Microsoft's Pocket PC platform.

"In the China market, the Palm OS would be more ideal, because it's a cheaper OS and the hardware probably is going to be cheaper," Lopez says. Most of the popular PDAs in China today are more like traditional Palm personal organizers than the larger, multimedia-capable Pocket PCs.