Palm chief extends his hand to corporations

Aiming to restore confidence in his struggling company, Palm chief Carl Yankowski announced on Tuesday several new deals designed to attract more corporate customers.

Under one deal, Big Five accounting firm PricewaterhouseCoopers will begin recommending Palm handhelds to clients as a way to increase profits by making employees more productive.

The two companies will work together to help businesses incorporate handhelds into their existing information technology systems. They also will develop and market products that give companies mobile access to existing software, such as customer relationship management and enterprise resource planning programs.

In a separate deal, Palm said it would sell XtndConnect server software from Extended Systems as a Palm-branded product by the fourth quarter. Palm had planned to acquire Extended Systems, which helps businesses access corporate information via mobile devices. But the two companies agreed to pull out of the deal after Palm's stock plunged.

"We may not be getting married, but we're still good friends and business allies," Yankowski said during a keynote speech Tuesday morning at PC Expo, which is part of Technology Exchange Week New York.

The announcements came hours before Palm is expected to report grim results for its most recent quarter.

After twice slashing estimates, the company now expects to report an operating loss of $170m to $190m for the quarter on sales of $140m to $160m. The company is also expected to say more about recently announced job cuts and its efforts to preserve its dwindling cash reserves.

During his keynote address, Yankowski worked to give his company a needed shot in the arm.

He asserted that Palm handhelds have already become an important tool for businesses. "We're way past early adoption. This is a market that has arrived," he said.

Steve Simpson, chief executive of Extended Systems, joined Yankowski on stage and described a pilot program at Moses Cone Medical Center Hospital in North Carolina in which Extended's software and Palm's handhelds are being used to deliver patient information, such as lab results and medical records. The records can be downloaded to Palm handhelds that doctors use when treating patients.

Yankowski noted that mobile devices are "creating phenomenal levels of freedom to take you anywhere your business takes you -- freedom, frankly speaking, from that annoying boot-up and PC hourglass".

He said he likes his notebook but doesn't find much need for it for the basic applications that people use when they're away from the office, such as email.

"It's a bummer when you have to balance this thing on your knee when you're at a warehouse... or in a vineyard," he said. "If you're a road warrior who uses mostly email, why would you carry a seven pound notebook?"

Palm also announced Tuesday that it would work closely with Panasonic to further promote the Secure Digital slot that Palm has made standard on its m500 and m505 products. Secure Digital is a flash memory card about the size of a postage stamp.

Yankowski said the Secure Digital format would allow companies to store large amounts of data, such as medical libraries or price lists, on handhelds.

He also demonstrated one of the first Secure Digital cards to perform a function beyond storing data. Dubbed MotionSense, the card will combine memory with an accelerometer, allowing people to scroll through maps and other documents using only one hand to tilt the Palm in the desired direction.

Separately, Intel's Xircom unit announced a wireless networking card for the Palm m500 series. The $300 add-on will be available in July, Intel said. Intel already has such modules for Handspring's Visor and Compaq Computer's iPaq.

In addition to having financial troubles, Palm is beginning to face competition from handhelds that use Microsoft's Pocket PC operating system, such as the iPaq.

Yankowski, whose company has shipped more than 15 million handhelds to date, offered a backhanded compliment to Pocket PC-based devices for recently reaching the 1 million mark.

"Of course, 1 million versus 15 million makes its own statement," he said. "Who do you want to party with?"

Staff writer John Spooner reported from New York, and News.com's Ian Fried reported from San Francisco

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