Bloomberg News

Palm Offers New Treo to Tap Demand for E-Mail Phones

May 15, 2006

Palm Inc. today unveiled its new Treo phone, the second of four models planned for this year, as the company taps growing demand for e-mail devices.

The Treo 700p uses the Palm operating system and has a similar design to the Microsoft Corp.-powered Treo, Senior Product Manager Steve Sinclair said last week. Verizon Wireless plans to offer the 700p in the next couple of weeks, spokeswoman Nancy Stark said today.

Palm in January released its 700w, which uses Microsoft software, to win business clients. Sunnyvale California-based Palm is seeking growth in Europe for the Treo as it vies with Research In Motion Ltd. (RIM)'s Blackberry for customers. Palm sold 564,000 Treos last quarter, while Waterloo, Ontario-based Research In Motion added 625,000 Blackberry subscribers.

``This is the new flagship smartphone from Palm,'' Sinclair said. ``We are definitely gaining share in the smartphone market in the U.S.''

Stark at Verizon Wireless said the new Treo will be priced similarly to the 700w model.

Sprint Nextel Corp. (S:US) is also expected to sell the new Treo. A Sprint spokeswoman, Amy Schiska-Lombard, wouldn't comment.

Palm shares fell 70 cents to $21.11 at 4 p.m. in Nasdaq Stock Market composite trading. The shares have risen 33 percent this year.

Redmond, Washington-based Microsoft is the world's biggest software maker.

To contact the reporter on this story: Rebecca Barr in New York at rbarr1@bloomberg.net.

To contact the editor responsible for this story: Emma Moody at emoody@bloomberg.net.


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