Acer is leading Palm to the promised land of the nearly 1.3 billion consumers, in Taiwan, Hong Kong, Singapore and China who want to use a PDA in their own language -- Chinese.
The two companies finalized an agreement yesterday which will put a Chinese language version of the Palm operating system on new Acer brand personal digital assistants (PDAs). These handhelds will hit market shelves by the fourth quarter of this year.
"This PDA will utilize a Chinese language version of the Palm operating system, and this Chinese version will be developed by Acer Brand Operations (ABO, 宏品牌事業群)," said Wang Jeng-tang (王振堂), president of ABO, which oversees all of Acer's own brand name product development and sales.
In return, Acer earned the right to sell PDAs that operate in both simplified and traditional Chinese language versions of the Palm operating system exclusively for an unspecified period. The Chinese version of the Palm operating system (OS) will not be available for competitors to license until Palm Inc releases an update of the software, according to Alan Kessler, general manager of the platform solutions group at Palm. He refused to comment on when that might be.
The only other Asian companies licensing the popular Palm OS, which runs on Palm brand PDAs and Handspring's Visor, are Japan's Sony and Kyocera and South Korean giant Samsung Electronics. Over 155,000 software developers have already created 10,000 software applications for the Palm OS.
To add value to the new PDA, Acer also plans to open a Web site devoted to developing Internet services for it, and lead the development of additional Chinese-language software for use with the Palm OS. The Acer PDA slated to come out this year will not be Web-enabled, but some wireless services will be available on the device, and an Internet-ready version is in the making.
"Acer Sertek has already opened a Web site and plans to offer free downloads (for Palm-driven PDAs). It's hard to tell where the revenue will come from the Web site, but it will strengthen their value-added offerings," said Henry Su, multimedia and software analyst at Jih Sun Securities (日盛) in Taipei.
Buyers of the new PDA will be able to transmit and receive information via Acer's Mobile Data Services lineup of software and services. The system runs on the same band as mobile phones, GSM, at around 9.6 kilabits (k) per second -- about the speed of a 1993-era personal computer.
Although the new Chinese-language Palm OS PDAs are a coup for Acer, the deal pits the Taiwanese firm against global heavies Compaq and Hewlett-Packard in the battle for the local handheld market.
Su pointed out that Compaq's iPaq, a handheld computer running a version of Microsoft Windows, is set to announce its own wireless strategy. Utilizing a mobile data system developed in Japan called the Personal Handyphone System (PHS), the iPaq will offer consumers faster download speeds of between 32k and 64k, on Web-like services similar to Acer's. Compaq is teaming up with First International Telecom (Fitel, 大眾電信), a subsidiary of First International Computer (FIC, 大眾電腦) to offer wireless services.
In addition, Compaq officials said a Chinese-language version of the Windows operating system on its iPaq handhelds will be available at the beginning of June -- approximately three months earlier than the Acer digital assistant.
Sales of Microsoft Windows-based palmtop computing systems -- led by Compaq's iPaq -- reached one million earlier this week, but that number pales in comparison to Palm's base of 13 million handheld users worldwide. The Palm operating system runs on an estimated 76 percent of all handheld computers.
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