PALM goes after corporate customers

<br>SANTA CLARA, Calif. (AP) _ At Ford Motor Co., handheld computers help assembly line workers to avoid lubricating the wrong machines, wasting thousands of dollars in production time when thirsty equipment

Wednesday, June 27th 2001, 12:00 am

By: News On 6

SANTA CLARA, Calif. (AP) _ At Ford Motor Co., handheld computers help assembly line workers to avoid lubricating the wrong machines, wasting thousands of dollars in production time when thirsty equipment grinds to a halt.

Doctors at Stanford Medical Center no longer turn their backs on patients while looking up a drug. And at San Jose International Airport, American Airlines clerks get boarding passes without requiring the disabled and elderly to leave their seats.

A growing number of professionals are using the portable devices to keep better track of data, get closer to customers, and keep vast amounts of information at their fingertips.

Palm Inc. and its rivals are targeting businesses more aggressively than ever before. Deep-pocketed and less fickle than everyday consumers, corporate customers can be revenue jackpots, purchasing dozens or even thousands of units at a time.

``The consumer market will still be important to drive technology and interest, but it's the enterprise market that will drive the big dollar amounts,'' said Ken Smiley, senior analyst with the Giga Information Group.

Though Palm is still the overall market leader in so-called personal digital assistants, with more than 16 million Palm-based devices sold since the first Palm Pilot debuted in 1996, rivals are fast encroaching.

Microsoft Corp., which makes a competing Pocket PC operating system used in devices such as Compaq Computer Corp.'s iPAQ or Hewlett-Packard Co.'s Jornada, says more than 1 million Pocket PC units have been sold since its new release in April 2000.

``Over a year ago, it was all Palm,'' observed Richard Owen, chief executive of AvantGo, a handheld service and software provider which saw its own Fortune 100 client accounts grow to 18 from two during the same period. ``Now, we see Pocket PCs, and RIM (Blackberry e-mail pagers) out there.''

Palm is well aware that business customers are vital. Citing the slowing economy and some inventory problems, company officials reported a fourth-quarter net loss Tuesday but said they expect to become profitable again in the company's fiscal second quarter ending Nov. 30.

Investors were cheered by the upbeat outlook. Shares of Palm jumped 18.5 percent Wednesday to $6.15 a share on the Nasdaq Stock Market.

``Enterprise is absolutely critical to our future,'' chief executive Carl Yankowski said in an interview. ``We think there will be a swing toward the enterprise market that will be twice the product growth that we've seen in the consumer market.''

Handango, a privately held PDA software company, says corporate customers account for 45 percent of its revenues, up from 15 percent only six months ago. ``Now companies are realizing that software applications on handhelds can improve their productivity,'' said Handango's chief executive, Laura Rippy.

Palm's Yankowski delivered the opening keynote at the Tech X/PC Expo trade show in New York Tuesday, touting market studies that show the popularity of Palms among mobile professionals. He also announced partnerships that could enhance Palm's access to businesses.

In a flashier move in New York's Times Square, Palm also unveiled a giant neon-lit ad, featuring skydivers taking a picture with a digital camera, then pulling the postage stamp-sized memory card from the camera and inserting it in a Palm m505 handheld, which the company hopes will successfully replace its popular, older Palm V model.

Microsoft, which has committed $25 billion to promote and build its mobile products, was putting on its own eye-catching roadshow. In the past month, the Redmond, Wash.-based tech giant toured corporate hubs in a dozen metropolitan areas across the United States, with two big rigs that doubled as a theater and giant showroom booth for the Pocket PC. The semi-trucks are now at the New York trade show.

``We're moving to have these devices deployed en masse to business customers,'' said Ed Suwanjindar, product manager with Microsoft's Mobility Group.

While many users and industry players say that handheld technology needs further development before being widely accepted, all agree that the trend is unstoppable.

Consider cardiologist Judith Swain, chairwoman of the Department of Medicine at Stanford University.

``It's my most important piece of technology. I even carry it in my golf cart on vacation,'' she said. ``Everybody I know has one.''