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December 21, 2005

Palm Profits Surge, Four New Treos Coming

Courtesy of Mobile Pipeline

Smartphone and PDA vendor Palm Tuesday reported strong profits and dramatically increasing sales of its Treo smartphone in the just-completed quarter. It also said it will release three new Treos in the coming year in addition to the Windows Mobile-based 700w, which will be released in a matter of weeks.

The company reported quarterly revenue of $444.6 million, which was an 18 percent increase over the same quarter a year ago. It bragged in an earnings call and statement that this was its eight consecutive quarter of double-digit growth and that its Treo now controls 36 percent of the market for converged devices in the U.S.

The company reported net income of $260.9 million, much of which was the result of a tax break. It had net income of $24.7 million in the year-ago quarter.

Palm president and CEO Ed Colligan said that the company added seven new cellular carriers for the Treo throughout the world, including China, in the just-completed quarter. The company said it shipped slightly more than 602,000 Treos in the quarter and about one million in the first half of the company's fiscal year. That's more Treos than the company shipped in the entire previous fiscal year, it said in a statement.

Colligan also hinted at the company's future rollout plans.

"We'll roll out the Palm Treo 700w smartphone based on Microsoft's Windows Mobile, and we'll announce three additional new smartphones during calendar year 2006," Colligan said in a statement. The Windows Mobile Treo will ship on time in January, he said.

That phone will be initially offered by Verizon Wireless and will support that carrier's 3G EV-DO service. He did not specific the nature of the other three smartphones that will ship, although a company executive was quoted recently as saying one of the phones would be Linux-based. One-time corporate sibling PalmSource has said it will release the first iteration of the Palm OS based on Linux this coming summer.

Speculation on the Web also centered around an updated Treo based on the Palm OS. In addition, the company said it will build in BlackBerry Connect software into the Treo 650 early next year.

Colligan noted in an Associated Press interview that PDA sales dropped 20 percent, making the company's strong financial performance all the more impressive.

"Growing the business while undergoing that change is remarkable," Colligan told the Associated Press.

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