Subject:  Palm talks about Pocket PC with Palm Advantage attachment

Dear Palm Solution Providers:

We've received some questions from the Palm economy regarding what we think about the new version of Windows CE, which Microsoft calls Pocket PC.  We expect that Microsoft will make a very big launch event and advertising campaign starting April 19, just as they did with the last version of Windows CE.

Just like last time, some industry analysts will announce that Palm is dead, because Microsoft's handheld has more PC features than Palm handhelds.  And just like last time, when the smoke clears we think Palm will still be on top.

We don't ever underestimate a competitor, though.  The market is too competitive and changes too fast.  Besides, there's no question that Windows CE is less unpleasant than it used to be.  So we'll continue to  work hard to tell Palm's story, including the amazing array of great software and hardware products that you bring to the Palm platform.

Now that we're a public company, we have very aggressive plans to drive the long-term growth of the Palm platform.  We'll be revealing more about those plans in the next several months.  And in the meantime, we think we have a great story to tell about Palm and our partners today.  Here's some of the information we'll be distributing.  You'll see this reflected in new and more aggressive marketing campaigns this summer.  If you get questions about Palm's competitiveness, we encourage you to pass this information along.  And we'd like to hear from you if you have comments on this memo, or ideas on things that we could do better.

Please email your comments and suggestions to [email protected] with "Pocket PC feedback" in the subject title.

Thanks very much for your support of the Palm family.

Michael Mace
VP, Product Strategy
Palm, Inc.

The Palm Advantage

Palm OS® handhelds are the standard

• Palm OS has more than 75% market share worldwide, and our installed base doubled in the last year.
• Palm OS has more than 5,000 software programs, 10-50 times more than any other handheld platform.
• Palm OS is supported by the leaders in enterprise software, including Oracle, Siebel, SAP, Lawson, Sun, and Sybase.

• They're designed for information management when you're on the go, not to be a shrunken PC.  Key features of a handheld are different from a PC:
• Simple.  You can instantly access the information you need.
• Wearable.  It's small and light enough that that you can carry it in a pocket or a purse all day, and the batteries last long enough that you can go on a business trip without fear of losing information.
• Mobile.  You can always update your information through wired or wireless connections, even when youÄre on the go.
• We believe Palm remains the clear leader in all three areas.

What to ask when evaluating a handheld

• How many software programs and hardware options are available?  As for any other computing product, the number of software and hardware options determine how much you can do with it.  Palm OS has by far the largest selection, with more than 5,000 software programs and hundreds of hardware expansion options.
• Do the people around you use it?  Handheld users share information.  They use the infrared connection to exchange business cards, information, and even software programs.  Make sure you're not stuck on a handheld island.
• How many companies sell it?  Which companies support the platform?  How many?  How innovative are they?  Palm licensees and OEMs include many of the most innovative companies in electronics, including leaders like Sony, Nokia, and IBM, and hot new companies like Handspring, Qualcomm, and TRG.
• Is it open?  Make sure your freedom of choice is protected.  Some handhelds restrict your choices by forcing you to buy all of one company's software programs, limiting you to a single expansion technology, or not working with the full range of corporate software.  The Palm platform gives you freedom of choice in software, with a multitude of different spreadsheets, document editors, e-book readers, mapping programs, financial management programs, etc. (see "Did You Know," below).  The Palm platform offers the most expansion options -- hundreds of external expansion products for the Palm-branded family, Springboard™ modules from Handspring, CompactFlash™ from TRG, and coming soon Memory Stick® technology from Sony. And Palm OS handhelds are designed to work with all leading computing environments, including PCs and Macs; Outlook and Notes; Yahoo and AOL; and the leaders in enterprise software.
• Are you forced to pay for features you don't want?  Everyone wants different things from a handheld.  Adding hardware features increases the weight and cost of the system.  Bundling extra software costs you money, and uses extra memory which adds even more cost and reduces battery life.  You'll carry your handheld with you all day -- make sure you're only carrying the programs and features you'll really want.  Palm puts the basics in its systems, and makes it easy for you to add whatever you want.
• How simple is it, really?  Beware of companies that try to cram an entire PC into your pocket.  Adding PC-style menus, windows, and programs can make a handheld too complex, and forces you to pay for extra memory and high-powered processors that can destroy battery life.  Remember, the most important features of a handheld are getting to the information you need instantly and reliably, and getting a battery life long enough that you can travel without the fear of losing your information.
• How well do the features work in real life?  Sometimes features work better in a demo than they do in real life.  A prime example is browsing the Web.  When connected to a phone line, browsing can look very fast.  But when using a wireless connection, which is what most handheld users want to do, the Web slows to a crawl.  You can get browsers for the Palm platform, but we also offer Web Clipping, a Web technology designed specifically for handhelds, which allows access to Web information in under ten seconds, even over a very slow connection.

• More than a dozen e-reading programs and thousands of e-books.
• Several full-function spreadsheet programs that can read and edit Excel files.
• Numerous document-editing programs that let you read and edit Word files.
• Online shopping from Amazon, Ebay, and many others.
• Several full-function database programs.
• Corporate tools that let you fill out forms, check inventory, take orders, and even make job offers through a wireless connection.
• Hundreds of games.
• Many financial management programs.
• Numerous drawing and painting programs.
• Tools that let you easily develop your own Palm OS programs in minutes.
• Two Web browsers.
• An MP3 player.
• Global Positioning System receivers and several mapping programs.
• Cellphones that are also full-function Palm-compatible handhelds.
• An electronic camera that lets you view pictures on your Palm handheld.
• Online weather from Weather.com, sports from ESPN, and news from ABC, the New York Times, and the BBC.
• A voice memo recorder.
• And thousands of others.