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Monday, 4 February, 2002, 11:14 GMT
Wireless data market set to hot up
Palm i705 offers secure email, internet and messaging
By BBC News Online's Geoff Lynn

Leading handheld computer manufacturer Palm has launched a new "always on" device which it hopes will strengthen its hand in a battle with rivals Microsoft, Compaq and Handspring for the wireless data market.

The Palm i705 - which offers secure email, internet and messaging - signals a departure for the Santa Clara-based company as the first device aimed squarely at business users and large corporations.

Palm has been hit by tough competition in both its main markets, with a series of devices based on Microsoft's Pocket PC operating system targeting the high-end business user, and a host of rivals including Sony, Nokia and Handspring producing gadgets aimed at consumers.

The Palm i705 handheld was conceived, designed and made especially for mobile business users and corporate IT

NTodd Bradley of Palm's solutions group

The tougher competition has brought about a sharp reversal in fortunes for Palm, which unveiled a net loss of $25.2m for the fourth quarter of last year, against a profit of $20.3m in the same period a year earlier.

Palm has seen its share of the market for handheld devices fall to 43% in December - down from 53% a year earlier - forcing it to spin off its operating systems arm and refocus its brand towards enterprise and wireless telephony.

The i705 is part of Palm's strategy to tackle the corporate market, and boasts support for up to 8 incoming email accounts, including personal email from services like

Targeting business users

Users will pay a monthly fee of around $20 for 100 kilobytes of data, with additional downloads being charged at $0.20 per kilobyte.

The new Palm will also be able to run AOL's instant messaging software, which allows users to have on-screen "chats" with friends and colleagues.

A miniature keyboard has been developed for "thumb typing" rather than tapping on the screen with a stylus.

Todd Bradley of Palm's solutions group said:

"The Palm i705 handheld was conceived, designed and made especially for mobile business users and corporate IT - a first for Palm."

Handspring's Treo 180
Integrated handheld computer and phone

"The freedom to travel while remaining connected to email and messaging is a key competitive advantage for people and companies."

Colin Holloway, Palm's Northern European marketing manager, said:

"I expect that in the next three or four years you will find more and more companies will actually be issuing a handheld when you actually join the company."

"It will be, here's your laptop, here's your mobile phone and here's your handheld device. We use the handheld device for this, this, this and this."

"I expect the total market for handheld devices to grow by between five and 10% this year, and then by 40 to 50% over the next three years.

It will be mainly driven by the business sector, although that will filter down into the consumer market."

One in the hand

Competition in the "mobile professional" market is predicted to intensify in the UK this year with the launch of Handspring's Treo - an integrated handheld computer and phone which is no bigger than an average mobile.

Handspring has signed a distribution deal with mmO2 - floated off last year by British Telecom - and will be available on mmO2's GSM network at first.

mmO2 has also been co-developing with Microsoft a device called the XDA which will run on GPRS. It is based on the PocketPC 2002 operating system and will have voice functionality, but will be aimed at "mobile professionals" who want data on the move.

Neville Street, vice-president of devices at mmO2, said:

"It is pretty clear to people in the market place, with the investment in 2.5G, and 3G networks to come, the opportunity for carriers like ourselves to create incremental values and drive new revenues on top of voice is in the data marketplace."

"That's one of our core strategies. If we did nothing we wouldn't drive our revenues on data into a leadership position if we just relied upon SMS."

"As a company, we're actually driving a whole range of solutions to the market place that will add value for data."

UK mobile phone companies see data as a key way to drive up their ARPU or average revenue per user.

Orange chief financial officer Graham Howe said the trend was "beyond voice" with data accounting for 14% of revenue in the UK.

That is expected to grow significantly with the introduction of GPRS and 3G.

See also:

24 Sep 01 | dot life
Gadgets get fruity
19 Dec 01 | Business
Palm losses widen
10 Jan 02 | Sci/Tech
Phones and handhelds get closer
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