Palm has single-handedly defined the handheld market. Its operating system has dominated since it raced to the front of the pack of contenders six years ago. This is true even in the face of repeated handheld salvos launched by software giants such as Microsoft and Apple, and hardware giants such as Hewlett Packard and Compaq. Competitors have repeatedly attempted to penetrate this market and failed. The question that you have to ask yourself is, what did Palm figure out that others didn’t? How did Palm at first succeed and continue to succeed even when so many others failed? The answer is easy to say but takes the rest of the chapter to explain. The simple truth is that they understood the magic formula—they figured out what customers really needed in a handheld and how much they were willing to pay. Wait, don’t just gloss over this last sentence. Mull it over a bit and let it influence your thinking about your own software development ideas and how you evaluate the Palm OS.