Well to some extent we're already competitors - the cost of a Palm + Pleco is comparable to the cost of Wenlin in a lot of cases, and we've gotten more than a few e-mails in the last year asking us about the differences between our software and Wenlin and why they should buy ours. And I've seen quite a few posts comparing us on other forums.
But no, I don't think a desktop version of Pleco is likely to increase the level of competition too much; even as we add Wenlin-like features like a built-in document reader / web browser, our software is still primarily oriented around dictionary search and flashcards, and theirs is still primarily oriented around its text editor, so it seems like there's room for both.
And ultimately I think our products' moving towards each other will do at least as much good as harm. We've certainly lost something by the lack of serious competition in our current market; if we had a competitor who updated their software regularly then we'd have to too, taking ambitious new releases like 2.0 and spreading them out over half a dozen smaller updates. There's also I think a little bit of hesitation among potential purchasers because they don't really have anything else to compare us to; having two or more products in an area gives you a sense of there being a "market," so you can pick the product with the best price / features and feel a little less like you might be getting ripped off. Plus, the burden of making someone aware of the concept of a handheld Chinese dictionary flashcard/tool falls entirely upon us, there's no one else out there helping us grow the market.
Plus, any Wenlin versus Pleco discussion is actually going to help both Wenlin and Pleco, since many of the people reading it won't be familiar with either of our products beforehand; some of them will end up buying Wenlin and some will end up buying Pleco (and a few might buy both) but regardless all of these are sales that neither of us would have gotten had that discussion not happened.