Nokia Shakes Hands With Palm
Nokia announced Wednesday it is licensing the software used in 3Com Corp.'s popular Palm organizers to help run a new generation of portable phones that let people browse the Internet and organize information.
The agreement gives a major boost to 3Com's ambitions to expand its Palm software business beyond hand-held computers. Finland-based Nokia, for its part, gets an operating system for its mobile phones that already is widely accepted by developers of applications and by millions of users of the Palm gadgets.
Nokia said the Palm operating system will provide the "user interface," or the arrangement of text and graphics that let people operate the mobile phone. The phone includes a pen-like stylus for manipulating information, just like the Palm electronic organizer.
The Palm OS will be integrated with another software program Nokia already is developing, called Epoc, that will run the phone's underlying functions.
While only a tiny fraction of the world's 300 million mobile phones currently give users Web access, the market is expected to quickly grow as companies forge alliances and develop new technology. By 2005, a whopping 1 billion people are expected to use mobile phones, letting more and more users get the latest news, trade stocks and even pay for purchases no matter where they are.
By licensing the Palm OS, Nokia appears to be hedging its bets. Nokia already has invested in a venture with two other mobile phone makers, Ericsson and Motorola, to develop the Epoc operating system for smart phones. The wireless group, Symbian, is adapting Epoc from an OS created by Psion PLC of Britain.
But few software developers have written applications for Epoc, in contrast to the scores of applications that have been written to enable users of 3Com's Palm to organize information and notes and even play games.
Redmond, Wash.-based Microsoft Corp. also is vigorously pushing its Windows CE operating system to mobile phone makers and is a formidable rival, but Microsoft's program has attracted fewer applications than Palm, though more than Symbian.
Attracting new applications is seen as crucial to drawing people to a new generation of mobile phones that let people perform a variety of Internet-based functions.
"Epoc has been a poor performer in the application area, and applications are critical for success," said Kenneth Dulaney, an industry analyst with the Gartner Group research and consulting firm, which is holding its annual gathering of technology managers here this week.
"The Palm OS has a rich set of application developers."
Palm is aggressively trying to shift its business to become more of an operating program developer, much as Microsoft licenses its Windows operating system to makers of personal computers and hand-held gadgets.
More than 5 million Palms have been sold since they were introduced in 1996, becoming a sort of mobile badge fr on-the-go professionals seeking a convenient way to store contacts, appointments and notes. 3Com plans to launch an initial public offering of the Palm unit early next year in a deal that could value the new company anywhere from $5 billion to $10 billion.