Palm Setting Up Shop in China

PDA maker Palm said Tuesday it has reached an agreement to sell its products and operating system in China as early as next month.

The Santa Clara, Calif.-based handheld computer maker’s PalmSource division said it has scored a four-year deal to license its OS 4.2 operating system to Legend Group . The announcement coincides with Palm’s release of its simplified Chinese language version.

The first Legend device with Palm inside will debut next month and cost US$240. Legend said the yet-to-be-named handheld will support a color screen, MP3-playing ability, a dictionary, address book and calendar.

PalmSource said it has also inked similar licensing agreements with Group Sense (International) Limited (GSL). Palm’s other operating system licensees include Acer, Handspring, Samsung, Sony, Symbol and Kyocera.

To better sell their products in the region, representatives with PalmSource told it is opening a subsidiary in Hong Kong and plans for a representative office in Beijing.

Legend Vice-President Lu Yan said the company plans on putting the Palm OS in more than half of the company’s PDAs by the end of 2003.

The joint venture is crucial to Palm’s success in Asia where it currently holds three percent of the market.

“The China market is very important, obviously,” PalmSource CEO David Nagel told a news conference. “Worldwide, China is one of the leading economic powers in terms of growth and diversification, and we see the same growth in consumers themselves.”

Market researcher International Data Corp has forecast China’s PDA market will grow 52 per cent next year.

“The impact of Legend in the market along with Palm alone is huge if you look at just the population of China. Clearly this is indicative that Palm is thinking creatively on how to sell their products beyond the U.S. markets,” said Jupiterresearch Research Director Michael Gartenberg.

PalmSource said it is also partnering with Portable Innovation Technology (“PITECH”) as the first Palm OS System Development Partner as well as collaborating with Tsinghua-Solutions, an authorized Palm OS developer training center in Beijing; and an agreement with Zhong Shan University, an authorized Palm OS developer training center in Guangzhou.

The company said the Palm OS platform is used by more than 57 percent of the handheld users worldwide. As of December 2002, more than 25 million Palm Powered devices have been sold, over 250,000 developers have created more than 15,000 applications.

The PDA maker said it is mainly focused on its two distinct subbrands for its portfolio of handheld products — the Tungsten and Zire families.

A representative for Palm said the new Tungsten “T” and “W” brands were selling well but final sales numbers from its research client NPD INTELECT was still being compiled.

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