Palm and IBM Joint venture

Tuesday July 23, 12:21 am Eastern Time
Reuters Business Report
Palm Sets Corporate Systems Pact with IBM
By Franklin Paul

NEW YORK (Reuters) - Palm Inc. on Tuesday unveiled an alliance with International Business Machines Corp. that gives the leading handheld computer maker a heavyweight partner in its battle with Microsoft Corp. to sell the devices to business



However, the deal is not exclusive, and analysts say Palm still faces tough competition from Pocket PC, a rival handheld systems developed by software giant Microsoft Corp.

Under the pact, Palm and IBM will develop a joint capability that will let customers securely and remotely access corporate applications and data using Palm's M500 series of handhelds, and others developed in the future.

Financial terms of the pact were not disclosed. However, Santa Clara, California-based Palm will license some software to IBM, and IBM representatives will be able to sell Palm devices to their clients.

While Palm is far and away the dominant maker of handheld computers and the operating system software that power them, its device are primarily purchased one at a time at electronics retail shops. Convincing executives to buy them in bulk as tools for their workforce has been less successful.

A potential roadblock for Palm is that most corporations already have some relationship with Microsoft, whose Windows software is ubiquitous, and whose Pocket PC handheld system is gaining acceptance in "enterprise" or corporate markets. (remainder snipped)