Palm readies for enterprise device push

Palm Inc. will aggressively defend its share of the PDA (personal digital assistant) market by launching new products this year and at the beginning of next year that target both the consumer and enterprise sectors, according to the chief executive officer (CEO) of Palm’s hardware division, Palm Solutions Group.

“We will launch three new (consumer) products this fall. We have been looking at how to bring new customers into the Palm economy, talking to non-Palm users to determine what would help bring them over to Palm. It comes down to date, contact and reminders,” said Todd Bradley, CEO of Palm Solutions Group.

Though Palm’s operating systems run more than three-quarters of the world’s handheld computers, the company is coming under increasing pressure from competing products, such as PDAs with built-in phones, running Microsoft Corp.’s Pocket PC 2002 software.

Along with adding new capabilities to its technology, Palm will be offering lower pricing: PDAs will be priced as low as US$100 in the U.S., Bradley said.

“When we mention the lower price points, the second question we are always asked is ‘Will we make money?’ Yes, though the price is low, I assure you, we will make money,” Bradley said.

Palm has also rethought the way it packages and sells its products.

“The products are packaged in a different way, for example using a clam shell that is easy to see. And we also plan to launch with different partners in different channels,” he said.

The Santa Clara, California, company, will launch a new PDA that uses “always-on” GPRS (General Packet Radio Service) mobile telecommunication technology for the European market by the end of the year, and in the U.S. in 2003, Bradley said.

The PDAs will synchronize with PCs through a cradle, and have SD (Secure Digital) slots for expandability.

Palm has yet to finalize agreements with carriers for the GPRS-enabled PDA and the new PDAs will not use the new version of the Palm operating system, Palm OS 5, Bradley said.

“We have never publicly stated that we plan to add Palm OS 5 to PDAs with GPRS. I don’t know how long the consumer would have to wait for such a product. But the product we are offering this fall is extremely strong and there is absolutely no fear of obsolesce at that price point,” he said.

Palm OS 5 will be the first software from Palm to run on processors based on a high-speed core from Arm Ltd., and will allow software developers to tap into the mobile phone market as well as offer faster clock speeds and enhanced security for handheld users. Palm’s first Arm-based OS 5 products will be hitting the market in the fourth quarter, beginning Oct. 28, according to Bradley.

Bradley said that Microsoft is presenting stiff competition for Palm and that the company does have a job on its hands wooing users who, using Windows software on their PC, may feel more comfortable with a Windows-type environment on their mobile handheld device.

“Clearly, it’s a Windows world and the question for us is, how will we develop devices that work within that world? It’s a matter of integrating applications and also working with partners to do so. We work pretty seamlessly with Lotus and Exchange. We also don’t try and jam a complex Windows operating system into the PDA. Our product is less expensive and more simple. Our focus is very much about the data, not the desktop,” Bradley said.

Palm also sees its user base as being a strong component in it efforts to fend off the competition. “Fifty per cent of Palm owners are repeat purchasers, that’s significant,” Bradley said.

Palm has also been focusing on getting its technology and products out to the enterprise market, particularly through partnerships such as those announced with IBM Corp. and BEA Systems Inc. in the third quarter.

“The perception is that we haven’t been that strong in the enterprise market, but historically, 10 per cent of our products have gone to the consumer, 10 per cent are large corporate purchases and 80 per cent are deployed within an enterprise environment,” Bradley said.

Palm also has an agreement with Siebel Systems Inc. to produce a thin Siebel client, (as opposed to the thick Siebel client which is produced for the Pocket PC), Bradley said.

“Our real focus is to drive products around these partnerships. For example, the deal with IBM will give Palm access to the IBM line of products and applications. We will start to get traction with IBM WebSphere Everywhere 4.2 sometime in October.” Bradley said.