If it's good enough for Gates...
The trio of Palm, Microsoft and Verizon have created a winner in the Treo Smartphone.
By Peter Lewis, FORTUNE senior editor


NEW YORK (FORTUNE) - Rivals Palm and Microsoft have finally converged. The Palm Treo 700w Smartphone, introduced by Bill Gates in early January, is the first Palm device based on Microsoft's Windows Mobile operating system software instead of Palm's own Palm OS.

And while some convergences are not pretty -- a train wreck is a convergence, after all -- the coming together of Palm (Research)'s elegant Treo hardware, Microsoft (Research)'s fifth-time's-the-charm Windows Mobile 5.0 software, and Verizon (Research)'s high-speed EV-DO nationwide data network is surprisingly harmonious.

Longtime Palm users at first may be appalled by the appearance of the Windows Jolly Roger flag on a Treo phone, but their alarm would be misplaced; in many ways, the Windows version of the Treo is more innovative than the Palm OS-based Treo 650 Smartphone that is widely regarded as the best convergence device available today.

Like the Treo 650, the Treo 700w combines a wireless phone with a calendar and contact organizer, notepad and calculator, wireless e-mail and web-browsing clients, instant messaging, a digital camera, a removable battery, and Bluetooth support for Bluetooth wireless networking, all in a device that's 5.1 inches tall, 2.3 inches wide and less than an inch thick. It weighs 6.4 ounces, beastly compared with some of the razor-thin fashion phones that are stylish today but a featherweight compared with the alternative of toting several unconverged devices, including a phone, a camera, an MP3 player, a PDA and a laptop. The 700w is actually a bit slimmer than the Treo 650, with a more chiseled look.

With the arrival of the 700w, corporate computer users who may have admired the Palm OS-based Treo 650 but couldn't sneak one past the IT manager into their Windows-only offices now have a superior alternative not just to the gaggle of clunky Windows Mobile smartphones that have waddled onto the convergence stage in recent years but also to other non-Windows phone and e-mail devices like the new RIM BlackBerry smartphones.

Despite the 700w's compact design, it has a bright, colorful LCD touchscreen (240 by 240 pixels) and a small but usable keyboard for tapping out Outlook, Hotmail, AOL and other flavors of public and corporate e-mail, as well as Office Mobile applications like Word, Excel and PowerPoint. If your company uses Microsoft Exchange 2003 Server, the Treo 700w's ActiveSync software synchronizes all your calendar, e-mail and contact information between your Treo and your desktop PC. (For crackberry addicts, a BlackBerry Connect mail client can be added to the Treo 700w.) The 700w boasts security features including VPN to make administrators happy.

Given the tight integration with Office applications and features like three-way conference calling and Voice Command ("What's my next appointment?" or "Call the boss"), you needn't tell anyone that the Treo 700w also comes with a 1.3-megapixel camera and Windows Media Player 10 software for playing music and videos.

The buttons on the backlit keyboard are still small enough to frustrate users with fat fingers, but a virtual, software-based keyboard is handily summoned for those who want to peck on the screen with a stylus.

Palm worked closely with Microsoft to streamline the home screen that appears when Windows Mobile fires up. Performance is brisk for a Windows Mobile device, thanks to Intel's XScale 312-megahertz processor.

The customizable TODAY screen is particularly useful, showing upcoming appointments, the number of new voicemail and e-mail messages, a Google search bar, speed-dial buttons, and a "dial by name or number" box for entering a phone number or looking up a name from the contact files. Enter a number, and the Treo goes into phone mode; type the first letter of someone's first name, hit the space bar, and type the first letter of the person's last name, and the Windows Mobile software drills down to the appropriate contact information. For those so inclined, the Treo 700w allows speed-dialing by photo; if you have mug shots of your contacts, you can call someone by tapping on his picture.

Windows Mobile a la Palm also solves etiquette problems. A simple toggle switch turns the ringer off and on. Say you're deep in conversation at a bar when the phone vibrates. Hit IGNORE WITH TEXT MESSAGE, which transfers the call to voicemail and automatically opens an SMS message to the caller. You type, "Sorry, I'm in a business meeting and can't talk now." The Treo sends the text message to the caller to let him know why you're ditching his call. Voicemail management is also improved in the Treo 700w, with VCR-like controls for rewinding, skipping, trashing and saving messages.

The 700w has a slot for MultiMediaCard and SD expansion cards for storing MP3 and Windows Media Audio files, video clips, Office files, games, digital photos, special applications like foreign language dictionaries or wine guides, or anything else that won't fit in the Smartphone's 60 megabytes of available user memory.

And of course, the 700w comes with a game of solitaire, which is de rigueur for Windows-based devices.

Verizon is the lone carrier at this point and sells the Treo 700w for $399 with a two-year service contract, or $599 without. Other carriers are expected to offer the Treo 700w later in the year (Sprint also offers EV-DO service), but they're unlikely to match the speed and reach of Verizon's CDMA2000 EV-DO network.

Verizon claims that EV-DO (Evolution Data Optimized) offers broadband speeds for wireless web browsing and file downloads, which is a shameless exaggeration. My experience on the Verizon EV-DO network rarely yielded more than 400 kilobits per second, while broadband is generally defined as 1,500 kilobits and up. But compared with other cellular data services, like EDGE (Enhanced Data rates for GSM Evolution, 100-kilobits-per-second real-world speeds) or -- ugh -- GPRS (General Packet Radio Service, ten kilobits per second, up to 50 kilobits if you're lucky), Verizon's EV-DO network is very fast. When users stray from the 170 or so cities where EV-DO service is available, the phone falls back to the CDMA 1XRTT network, which at 60 to 80 kilobits per second is still faster than the more common GPRS.

The downside of EV-DO is cost: Verizon charges $60 a month for the data service, and that's on top of any voice plan you might have. In addition to the relatively steep cost of the phone, the digital groceries needed to feed it could easily be more than $100 a month. But if mobile access to voice and voicemail, Outlook e-mail, Websites and Office applications can increase your productivity, the Treo 700w is a good investment and an even better traveling companion.

According to a Palm executive, Bill Gates said the Treo 700w would be his next phone. If it's good enough for Bill ...

Those who still prefer the cleanliness and familiarity of the Palm OS version of the Treo are in the unaccustomed position of admiring the new Windows-based 700w. But the very presence of the lowercase w suggests that Palm may have a non-w Treo 700 in the works.

Or better yet, maybe Palm will create a Treo 700W, with a capital W, which stands for Wi-Fi-enabled, a feature lacking in the 700w. That would be Wonderful, wouldn't it? Top of page

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.