PalmSource in Good Competition with RIM

In a bid to fight the powerful Research in Motion, Palm Inc.’s operating system unit PalmSource Thursday teamed with the
embattled start-up Good Technology to
offer customers the Goodlink wireless corporate e-mail system with the
Palm operating system.

The idea is for Sunnyvale, Calif.’s Palm to provide corporate customers with
an end-to-end system for synchronizing multiple brands of PDAs with
corporate e-mail and data — benefits most enterprise users are expecting
out of today’s handhelds.

Meanwhile, fellow Sunnyvale native Good, less than a year old but already
embroiled in major legal entanglements with Waterloo, Ontario’s RIM, hopes
to reap the benefit of broad exposure through Palm’s leading OS. Palm’s OS
commands more than 50 percent market share of handhelds sold to enterprises
worldwide, according to data from Gartner Dataquest.

The companies will collaborate on technical aspects to ensure quality. They
also intend to promote and market GoodLink on Palm OS.

Yankee Group analyst Sarah Kim said the deal makes more sense for Good Technology, who she said needs to get as many original equipment manufacturers as it can to succeed. Good also makes a handheld, but Kim told that the market does not need another PDA player at this point.

As for Good’s battle with RIM, Kim said it was unwise for the start-up to rely on poaching another company’s customers to remain viable.

While Good has been busy being served suit after suit from RIM, Palm is on
its fall swing of exposure and product announcements. Palm this week
unveiled new business software, called Tungsten Mobile
Information Management Solution
, designed to let corporate workers
wirelessly access e-mail and other data. The firm also said it would bring
two new handheld brands to the table, Tungsten and Zire, for large
businesses and consumers, respectively.

Over all, handheld shipments suffered through much of 2001 and 2002. IDC said worldwide handheld device shipments declined 9.3 percent from 2.89 million units in Q2 2001 to 2.62 million units in Q2 2002.

“The demand for handheld devices remained soft during the second quarter due to weak economies in most regions,” said Weili Su, senior analyst of IDC’s Smart Handheld Devices research service. “Looking a few months ahead, we expect worldwide market growth to remain flat from a year-on-year perspective, for the remaining two quarters of the year.”

Also noteworthy was the effect the Compaq/HP had on the handheld market. IDC said HP is now the No. 2 handheld player to Palm. Palm shipped 845,640 units with a unit share of 32.2 percent during the second quarter. Conversely, Hewlett-Packard shipped 431,650 units, capturing 16.5 percent share.

In related news, Samsung Electronics Co. has decided to renew its
two-year-old license with Palm. Samsung will now carry Palm’s OS in its
handhelds through 2005.

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