Palm Handhelds Equipped with Improved Features, Services

As expected, Palm Inc. Monday launched its two newest handheld computers —
the monochrome m500 and color m505 — to target the steadily expanding
number of users expected to shell out $400 to $500 for quality products that
house their personal information.

Rest assured, the market is growing. IDC Research, which pays close
attention to mobile devices, believes the total number of shipped handheld
computers will grow to 33.6 million in 2004, more than double the 2001
estimate of 14.9 million.

At a quarter of a pound, the m500 handheld is scheduled to be available for
an estimated $399 in late April. The m505 is scheduled to be available in in
May for about $449. Some features Palm took care to tout would deign to make
its new products more wearable and wireless-capable when stacked up against
such competing products as Handspring’s just-launched Quick Visor, Compaq
Computer Corp.’s iPAQ Pocket PC, and Sony Corp.’s new CLIE handheld, which
is based on Palm technology.

These features include a Secure Digital (SD) and MultiMediaCard expansion
slot about the size of a postage stamp, a new Universal Connector for
hardware add-on modules and Internet connectivity software.

These new Palm features, Goldman Sachs said in a recent research report that analyzed impacts the evolving Palm product lines could have on gross margin and average selling price figures, are an attempt to give the m500 series gross margins a lift; GS believes the m500 will enjoy a 30 percent gross margin, with a 40 percent gross margin garnered by the m505.

Palm’s expansion slot offers plug-and-play use of the industry’s smallest
expansion formats: SD and MultiMediaCard
. The expansion cards, which range from 8 megabytes (MB) to 256 MB,
can be carried and inserted in the expansion slot for instant access to
applications, data storage, images, and video clips. SD, in particular, is
used widely — more than 200 companies, including Panasonic, Toshiba and
SanDisk, support the SD card standard
for use in their products.

Byron Connell, vice president of product management and planning at Palm
Inc., said corralling SD and MultiMediaCard technology for his company’s new
handhelds was a no-brainer; like many original equipment manufacturers, Palm
is keen on honing its products’ form factors and boosting their memory
capacities to meet the evolving needs of consumers.

“Users can now easily carry additional memory, video clips, images,
applications, games, backup capability and more,” Connell said.

The SD format also supports input/output (SDIO) connectivity for
manufacturers to miniaturize their technologies to create modules for
scanners, radios, modems, cameras and MP3 players. Toshiba and Panasonic are
two OEM’s which plan to create SDIO cards using technologies such as
Bluetooth, the much-ballyhooed short-range wireless standard.

Arthur Matsumoto, vice president of planning at Panasonic’s North American
headquarters, Matsushita Electric Corporation of America, lauded Palm’s
endorsement of SDA.

“We expect that the launch of these new SD-capable Palm handhelds will be a
major step forward for the SD format as a whole,” Matsumoto said.

Accompanying the small, yet jazzed-up memory slots in the m500 is Palm’s new
Universal Connector, a connector and attachment methodology expected to
become ubiquitous in future Palm handhelds. The Universal Connector will
allow developers to create common hardware peripherals, such as wireless
modems, cameras, GPS receivers and MP3 players.

And that is just the hardware. Palm has also embedded Palm Mobile
Connectivity software in the new PDAs, which are geared to allow customers
to connect to the Internet and manage e-mail and Short Messaging Service
(SMS) virtually anytime, anywhere using a compatible modem or mobile phone.
The software includes Web clipping technology, which makes it possible for a
user to check out the goings-on at such popular destinations ABC News, ESPN
or CBS Marketwatch, while commuting to work on a bus or train.

Palm has also embarked on myriad partnerships with some of the largest
product makers and service providers in the online business. In the U.S.,
m500 and m505 are fitted with America Online Inc. for the Palm OS. IBM Corp,
too, is banking on the m500; it based its pending new versions of WorkPad on
the Palm product.

But perhaps the most discernible bonus among users’ quests for value-added
products and services include the following apps available for the m500
series. These are targeted for anyone from the casual user to the “executive
road warrior,” according to Palm.

These partnerships include:

  • DataViz Documents To Go 3.0 — Enables users to view and edit Word
    documents, Excel spreadsheets and other document types

  • MGI PhotoSuite Mobile Edition — Users can view and share images and
    video clips

  • Infinity Softworks powerOne Personal calculator — Users can perform
    advanced math and business functions

  • AvantGo — Provides wireless and offline access from a handheld to
    content and applications on the Web

  • Chapura PocketMirror 3.02 — Synchronizes with Microsoft Outlook
    calendar, contacts, tasks and notes

  • Macronix — offers read-only MultiMediaCard media for the Palm m500
    series handheld computers

  • Novatel Wireless Minstrel m500 — a series of wireless handheld modems
    for the Palm m500 series

  • Portsmith Inc. — offers the Portsmith Ethernet cradle for the Palm
    m500 and m505

  • SanDisk Corp. — is supplying Palm with Secure Digital (SD) flash
    memory cards for the Palm m500 series handhelds

  • Socket Communications — Digital Phone Connection makes it easy to
    attach a Palm m500 or m505 handheld to a mobile phone for wireless
    applications such as e-mail, Web browsing, e-commerce and remote access to
    corporate data

  • Shinei — offers i-Vox for the Palm m500 and Palm m505 handhelds, from
    Shinei International; gives people an easy-to-use voice recorder with
    99-message or eight-minute recording capability so they can make reminders,
    phone numbers, driving directions or notes to self

Lastly, the m500 comes with Palm Reader, allowing consumers to read
electronic books on their Palm’s. This capability was accompanied Monday by
Palm’s purchase of, an eBook content provider for handhelds.
Financial terms of this deal were not made public.

Assets of the deal include a growing list of 2,000 titles from major U.S.
publishing houses and the Peanut Reader eBook reader application. Peanut
Reader and will be called Palm Reader software and Palm
Digital Media, respectively. Palm Digital Media, which will become a group
within Palm, will retain the 17 employees and remain in
Maynard, Mass.

With the Palm Reader app, users can download best-selling novels and
reference manuals from in minutes.

Mike Lorion, vice president of Vertical Markets for Palm said an
amalgamation of leisure readers, business professionals honing job skills,
commuters catching up on the Wall Street Journal, or students can
benefit from being able to carry reading materials in a device that weighs
only ounces and also manages the rest of their information.

To be sure, some research firms are bullish on the prospects of eBooks. A
December 2000 Forrester report found that digital delivery of custom-printed
books, textbooks and eBooks will account for revenues of $7.8 billion —
17.5 percent of publishing industry revenues — in the next five years.

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