Palm:
With Palm OS in a tailspin, Palm will adopt Windows Mobile as its flagship operating system for high-end hardware; introducing new handheld models based on Windows Mobile 5 (Pocket PC) in the Spring. I hate to break the news to hardcore Palm fans who thought Palm's embrace of Windows Mobile would begin and end with the Treo 700w, but it's only the beginning. The move represents a platform shift. Garnet will now be relegated to low-end and mid-tier hardware, while Windows Mobile fills out the top slots on both Smartphones and traditional handheld models. You didn't really think Palm was going to limp along with Garnet forever did you?

On the hardware front, the general trend I see is fewer handheld devices compared to Smartphone offerings (no surprise there.) In fact, by the end of the year, I wouldn't be surprised if Palm's entire handheld line is condensed into just two models; low-end and mid-range. The high-end slot will be filled in by Smartphone devices. A Zire 72 replacement is unlikely given the TX already fills that slot well. We may see an E2 replacement, but even that seems unlikely given the overall declining sales of traditional handheld devices. What about the much vaunted Mobile Manager category? Well, the entire category was mythical to begin with. Consumers rightly observed the LiveDrive being nothing more than a typical PDA in wolf's clothing, which is partly the reason for its failure. That and the fact that the days of $500+ PDAs are long gone. Say goodbye to LifeDrive and the Mobile Manager moniker.

Expect to see more cellular devices in the Spring. We already know that two new models are coming; one low-end, one mid-range. What isn't yet known is what software will power these devices. And this is where things could get interesting. I expect the mid-range model to be powered by Windows Mobile Smartphone. The low-end model, on the other hand, could run Garnet, but even that seems suspect considering it would cost nearly as much to fine tune Garnet in-house as it could to outsource development of a new middleware layer. To that end, Palm could surprise us by following other handset makers palybook by creating a J2ME phone with a custom software layer rolled on top of Linux; exactly as Motorola has done.

The only question is who would develop the software for Palm. Would they do this internally (they have hired some “Linux” programmers recently) or externally through partnerships with experienced embedded system firms like Wind River? Hard to say, but keep watching because this could get very interesting.

And I wouldn't count on this low-end "Lowrider" model to look anything like a Treo. Given its target market, I think we're looking at a Nokia killer here, meaning something that plays in the same segment as Symbian S60 based phones. You can expect this model to have a traditional keypad in place of the QWERTY keyboard, with candybar or clamshell form factor, and no touchscreen. If it does have a QWERTY keyboard, my suspicion is that it will be a slideout system in a form factor nearly identical to that of the LG F9100. I wouldn't be surprised if "Lowrider" or its bigger brother looks very much like this phone.

Palm could also be planning a mid-range Smartphone model in a thinner, sleeker package aimed at Motorola's Q phone.

A Treo 700p will launch later this year as well, but is nothing more than the Palm OS version to the Windows Mobile model, running Garnet.

The Treo 700w meanwhile proves to be a homerun. However, don't expect numbers too significant to Palm's overall unit sales until this model becomes widely available through other carriers, especially the GSM market, which won't happen until the second half of this year when Verizon's exclusive contract expires. Then things are going to heat up.

Access/PalmSource:
PalmSource will surprise everyone by delivering Palm Linux (the Palm name will be dropped of course) in the Spring quarter. However, this will be a developer release only, intended to give both hardware and software developers an early look at the OS. Hardware based on the new platform won't arrive until well into 2007.

What's worse, Palm Linux will offer little changes or innovations over Garnet/Cobalt. Expect the initial release to be nothing more than Cobalt APIs grafted on top of Linux. Interesting...yet uninteresting in the same instance.

2006 will prove to be even rougher for the Palm platform than 2005. With most licensees gone, Palm is the last significant player in the mobile space...and even that's going to change with the adoption of Windows Mobile.

Cobalt? I know a lot of people have been counting on an unexpected release of Cobalt-based hardware this year, but frankly I would write this OS off for good. There are fundamental reasons my Palm and other licensees chose not to adopt Cobalt (scuttlebutt is Cobalt even drove licensees away.) Desperation and frustration with Garnet alone won't be a driving factor for Cobalt's adoption. Garnet will continue to carry the flag for Palm OS through 2006 until Palm Linux's untimely arrival next year.

Microsoft:
Expect to see Microsoft extend its presence, and growth, in the wireless space, at a cost to its competitors...especially Palm OS. But I see RIM as a big obstacle in Windows Mobile's path to ascension. Blackberry remains one of the hottest technologies around, and people love them. Unless Microsoft can begin building that kind of brand awareness and loyalty that Blackberry and Treo have, which they haven't done a good job of yet, I see Microsoft winning in numbers, but not hearts and minds. But then again, maybe that's been Microsoft's strategy all along?

Plain vanilla Pocket PC is dead. Beyond a few token relics on the market, no one is investing in this space. It's all phone based hardware from here on out, in case you hadn't already noticed. That's less of a prediction, and more reinforcement to a point.

HP:
More of the same from the dear old garage company that spawned an industry. HP will put most, if not all, its mobile efforts into Smartphones. My gut tells me the current handheld line is the last we'll see of iPaqs. Expect to see more wireless handheld, but not much in the way of traditional offerings.

Dell:
Ah...Dell. This is the one prediction I keep making every year that comes up wrong, and yet I just know I'm going to get this right eventually. So here we go again...I predict Dell will exit the PDA business. If not, they simply MUST move into the Smartphone space as other handset vendors have done...or else. If they don't, no one other than Axim fans are going to care, because the market certainly isn't interested in the kinds of mobile devices Dell is peddling these days. If you're not in the wireless game, you're simply not a player. Given the Axim's dismally small slice of the mobile pie, will it really matter whether Dell stays in the game or not? Nope.

And such a wasted opportunity it would be. Given Dell's corporate presence the time is right for them to go after RIM's share of the market with a Windows Mobile based Blackberry clone. Call it what you will, AximBerry, DellBerry, BlueBerry, whatever. Dell's low-cost, high-volume business model combined with a good wireless email device could make a lot of competing handset vendors (including Palm) very nervous.

RIM:
And speaking of everybody's favorite berry flavored email device. RIM will come out alive and on top of its legal woes, though a somewhat bruised fruit. Provided their legal battles doesn't prove too costly to their financials, we could even see an acquisition in the works. Whom might that be? Well Palm, maybe. RIM might be interested in scooping up Palm. Unless Palm gets acquired by Google first. Hey, don't laugh. They just bought my neighbors house. I know it's only a matter of time before I see that goofy Google logo in my backyard. Damn you Google!

Nokia:
As popular as Nokia products are in the mainstream phone market, I see the company having a bumpy ride in the more serious Smartphone space. I predict the upcoming Nokia Blackberry clone, the E61, will be a complete flop. As will the much hyped Linux-powered Internet Tablet which fails to find a market.

Stick to what you know best, Nokia. Like cutesy phones.

Motorola:
The Q phone finally launches this year, and becomes a runaway success. Yes, I know it runs Windows Mobile Smartphone rather than the more flexible Pocket PC variant. But when you consider this device's target market; the Blackberry crowd, I think it's going to do just fine. Provided of course Moto doesn't do something stupid like set the price point way too high.