"The conventional wisdom is that Microsoft is gaining a lot of momentum, but Palm is still the market leader," said Alexander Hinds, president and chief executive of Blue Nomad, which makes the Wordsmith word processing application for the Palm operating system.
Glenn Bachmann, president of Bachmann Software and Services, which makes a number of Palm applications, said: "There's still a tremendous amount of opportunity in the Palm software area."
One of the reasons behind the sense of impending doom ascribed to Palm by many in the industry is Microsoft's push into the enterprise market - an area that the company has traditionally dominated.
"[Palm is] going to face stiff competition from Pocket PC," said Kevin Shahbazi, vice-president of business development at Trust Digital, which makes a series of encryption products for the Palm operating system and has recently released its first Pocket PC application.
Shahbazi predicts that Pocket PC will post large gains in 2001 and said Palm would need to work more closely with third-party developers that are already strong in the enterprise market to counter the move.
The momentum may be behind Pocket PC right now, but Palm still has a solid foundation and a strong installed base to work from, Shahbazi said.
IDC predicts that Palm will continue to remain the market leader in the handheld market for the next five years. However, Travis Glasson, a research analyst at IDC, said: "Microsoft is going to be especially effective at wooing corporate accounts."
Palm's position has not been helped by the length of time between upgrades to its operating system. Palm 5.0, a major upgrade that will mark the platform's transition to the more powerful StrongARM processor, is set for some time in 2002. Palm currently uses Motorola's 33MHz DragonBall chip in its devices.
"There is a little more excitement in Pocket PC - I'm not really sensing the same level of excitement in the Palm community," said Hinds, who added that "a lot of Palm users are sensing a real lack of innovation" on the platform when compared with Pocket PC.
"I don't think the transition to StrongARM can [rekindle that excitement]," said Hinds.
"It makes me nervous that the Pocket PC has continued to evolve and the Palm operating system has lagged behind," said Paul Moreton, vice-president for marketing and sales at Palm developer Cutting Edge Software.
Despite their concerns, Hinds said Blue Nomad is not looking at the Pocket PC platform, and Bachmann is only evaluating the possibility.
Blue Nomad's plans could alter as installed user-base figures change, said Hinds. "As a business decision, we [would] consider developing for Pocket PC, regardless of which platform I prefer," he said. "We will develop for the platform that has users."
The notion that there will have to be a single winner in the handheld area may be false, said Bachmann. "By and large, people are doing very normal business things on the [Palm operating system]," he said, claiming that users do not need the advanced multimedia features that Pocket PC offers.
Glasson agreed, saying: "There's not going to be one handheld platform for all users."