Palm's Mace Is ‘Paranoid' About PocketPC

FRAMINGHAM (04/18/2000) - Michael Mace, chief competitive officer at Palm Inc., plans to have advanced paranoia this week as Microsoft Corp. and its hardware partners launch the competing PocketPC Wednesday.

Mace, who earned a political science degree with a specialty in nuclear deterrence, said his paranoia is not some "duck and cover" '50s flashback, but the primary component of his role as chief competitive officer. He claims that the title is appropriate in the fiercely competitive information technology industries. Despite being the leader in a market expected to grow from $2.8 billion this year, up $800 million from last year, Mace said, "My job is to make Palm as internally paranoid as possible. We can't afford to become complacent, and I want to keep on eating."

Keeping an Eye Open

Microsoft stokes his paranoia, Mace said, because even though "the Palm OS is based on Windows and we have a good relationship with Microsoft, you never turn your back on them."

Mace said he intends to watch Microsoft and the PocketPC closely "because they have a long history of making gradual improvements to their products, and we can learn from what they are doing - and when appropriate, add innovations to our products," he said.

When not hyperventilating over potential inroads by Microsoft, Mace said, he spends time worrying about increasingly smarter cellular telephones, calling mobile phones his "No. 2 concern after Microsoft." Palm is aware that some analysts and competitors believe "that once intelligence is built into cell phones, Palm will be destroyed," he said.

Santa Clara, California-based Palm doesn't subscribe to that theory, because even the smartest cellular phone is still a dumb terminal, he added.

But Palm does see a future in partnership with the cellular phone industry, signing agreements with Finland-based Nokia Corp. to develop products "that will put a Palm and a cell phone in one device," which he calls the "ideal" combination of two devices that executives now wear strapped to their belts.

Gartner Group Inc. in Stamford, Connecticut, said Palm and Mace need to be even more paranoid if the company wants to maintain its edge. Gartner analyst Ken Dulaney said Palm "has become complacent," and he whipped out a Palm personal digital assistant (PDA) and a PocketPC to illustrate his point. Pointing to the sleek, curved design of the PocketPC vs. the squared-off look of the newest color Palm, Dulaney said Palm has already lost the "fashion" race - and emphasized that form is as important as function in the PDA markert, even for corporate users.

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