Palm looks to gain ground in Asia

Handheld device maker is betting on emerging markets; analyst says vendor must step up development efforts to fend off rivals.
Written by Victoria Ho, Contributor on

Palm plans to expand in Asia's emerging markets, but is it enough to give the handheld device maker the boost it needs?

Karthik Srinivasan, Palm's Asia-Pacific managing director, told ZDNet Asia in an interview that the company plans to expand its reach and strengthen its partner relationships.

"Our Vodafone relationship now extends into Asia-Pacific, and we're looking to expand that in the region to reach more people. We also want to broaden our audience," said Srinivasan. He added that the Palm Treo 500v, which has a lower price point, is its "first step in that direction".

"We are expanding into countries like China and India--launching a product with China Mobile and AirTel...the opportunity in these two countries is huge. People are increasingly willing to spend on gadgets there," said Srinivasan.

According to Aloysius Choong, IDC Asia-Pacific's senior analyst for personal systems, Palm will need to ramp up its development efforts to fight off the growing competition.

Said Choong in an e-mail: "While the new Treo 500v device will help Palm target emerging markets like India, we think the device maker has to speed up its overall development efforts at a time when the likes of HTC, Nokia and (soon) Apple are cranking up the pressure in the converged [device] market.

"Palm can perhaps take a lesson from [RIM], which has opened new markets and segments in Asia with its Pearl and Curve," added Choong, referring to the BlackBerry maker's devices targeted at the consumer segment instead of its traditional enterprise market.

Palm's converged device shipments hit a high in the region in the first quarter of 2007, "but has steadily declined since", the IDC analyst added.

Palm recently posted a loss for the first time in four years in its latest fiscal quarter ended Aug. 31, adding to speculation on Palm's future.

However, Srinivasan said, it was nothing to be alarmed about and is not "an indication of things to come".

"The loss was due to the one-time costs we have absorbed with regard to patent acquisition and operational costs, to the tune of US$6.6 million in restructuring costs and some US$5 million in patent acquisitions," said Srinivasan.

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