Continuing in the vein of companies trying desperately to lose their markets to Microsoft, take a look at Palm. They had a tremendous, overwhelming dominance of the handheld OS market, and their current share of the market for new handheld sales is a little over 50%. They seem hell-bent on throwing away a market they singlehandedly resurrected with the original Palm Pilots.

Those of you who’ve read my site for a while know that I was at the rollout of the original PocketPC, and I even had, thanks to the kindness of a friend, one of the older Windows CE handhelds. And when I first saw the PocketPC, I thought, “They got it.”

Because Microsoft was addressing two major weaknesses of Palm. The first, and most often discussed, is the corporate manageability aspect. Palm had done nothing to see that their handhelds played well with VPNs and Exchange servers and all the other centralized, top-down Big Brother hoo-ha that corporations love. Which was a bad idea, because, while the consumer market sure is fun, corporations have the power to buy 100 or 1,000 or 10,000 Palms with one purchase order, and that’s only something that can happen if they’re able to support such an endeavor.

The other, less tangible, element that the PocketPC captured (and Palm, I must concede, is finally making some belated progress in this regard) is the Toy factor. People who have PDAs today are, for the most part, gadget people. There are, to be sure, the occasional stories of the busy executive who only uses it for addresses and phone numbers, and the largely-apocryphal grandmothers with recipes in their Palms. But the core audience is people who like toys, and who don’t mind spending their money on a device whose primary functions are largely equalled, and sometimes exceeded, by a paper organizer that costs a coupla bucks.

So, for toy fans, make it color. Make it play MP3s. Let it browse real web pages, with a real web browser. Make it, for super geeks, programmable with tools we already know. And these are the things Microsoft did. Palm, on the other hand, has actually balkanized their market, with each model having a different hardware platform, and a few even having different processors. Some can play MP3s, but there’s no standard API to do so. Some have color.

Now the big thing that Palm is trying to push is their Palm OS 5. Besides being fully buzzword-compliant, the new OS features the stunning new innovation of Broken Backwards Compatibility. Yes, the only advantage Palm has, its broad range of useful, well-written apps, is being thrown in jeopardy. Granted, the existing Palm OS is such a piece of crap that it’s a necessary step at some point. But these are the sorts of decisions that ex-CEOs long regret.

I’m curious what kind of underhanded MS tactic Palm fans will attribute the eventual failure to. Maybe they’ll accuse Microsoft of bundling PDAs with Windows XP. The real failure is Palm’s incredible lack of cluefulness. If I were a partisan, I’d be bitterly disappointed.