Palm CEO Resigns

Palm Inc. Chief Executive Officer Carl Yankowski announced his resignation Thursday as the firm continues to
plod on in the face of the growth-challenged handheld market. The Santa Clara, Calif.-based handheld maker also said the schism of its hardware and software business is nearly complete.

Palm’s board Chairman Eric Benhamou agreed to serve in his place until a permanent successor is named. Benhamou will chair an
executive council that will help him lead the company until a new skipper is named. The council comprises David Nagel, Platform
Solutions Group chief executive officer; Todd Bradley, Palm executive vice president and chief operating officer of the Solutions
Group; and Judy Bruner, Palm senior vice president and chief financial officer.

Yankowski did not announce his future plans, but said: “With Palm’s transition into two individual businesses almost complete, my
role has changed, and it no longer matches my aspirations,” Yankowski said. “I leave confident that our separation and solutions
strategies, combined with the new leadership at the helm of both businesses, will result in increased shareholder value. It has been
an honor to lead Palm.”

Palm is in the final stages of its internal separation into two businesses, which it announced on July 27, 2001. With the new structure,
the Platform Solutions Group will operate independently but will still use Palm’s infrastructure and staff services. Palm expects to
begin reporting revenues and operating results separately for the two businesses for its third fiscal quarter ending March 1, 2002.

Benhamou also confirmed that despite a sluggish economy, Palm’s second fiscal quarter remains on track with the revenue guidance
provided in Sept.

“While the economic slowdown persists, and consumer confidence has fallen following the Sept. 11 terrorist attacks, we are
encouraged that sell-through has rebounded to levels above that of the summer months,” Benhamou said.

Gartner’s Dataquest arm said Monday in preliminary results that worldwide PDA shipments totaled 2.54 million units in the third quarter of 2001, a 9.5 percent decrease from the second quarter of this year. It said Palm saw a slight decrease in handheld shipments, from Q2 TO Q3 — from 509 to 479 units. It also estimated that Palm’s operating system shipments were down 3 percent from Q2.

However, Dataquest did not blame Palm or No. 2 handheld maker Handspring for this. Instead, it saw Microsoft Corp.’s Pocket PC 2000 as a market freezer.

“An October ship date for Microsoft’s Pocket PC 2002 was known a few months in advance to those who follow the PDA market, and customer knowledge of this milestone event appears to have significantly dampened demand for and shipments of Pocket PC products during the third quarter of 2001,” said Todd Kort, principal analyst of Gartner Dataquest’s Computing Platform Worldwide group.

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