Palm Shares Jump As New Centro Smart Phone Debuts
SAN FRANCISCO (Dow Jones) -- After being bruised in the heavily competitive smart-phone market, Palm Inc. unveiled a new device Thursday that the company hopes will appeal to a broader base of cell phone buyers.
At a media gathering in New York City -- that was broadcast via the Internet -- the Sunnyvale, Calif.-based company lifted the wraps on a device dubbed the Centro.
The Centro launch was not a complete surprise, as leaked photos of the device have been circulating for weeks on the Internet. Nevertheless, the news seemed to excite investors, who bid Palm shares up more than 5% following news of the launch.
Palm was trading up 87 cents at $16.30 by mid-afternoon. The stock is about 16% off its peak from late March.
Designed as a small smart phone comparable to the popular BlackBerry Pearl, the Centro was more notable for its price tag. At $99, the company is hoping the device will attract user shopping for regular cell phones who may be put off by the $200-$300 price tags carried by most smart-phone devices or the expensive iPhone -- the cheapest of which costs $400.
Palm CEO Ed Colligan told the gathering that the smart-phone segment currently accounts for about 5% of total wireless-device sales, leaving a large part of the market untapped.
"This is not attempting to be an 'iPhone killer,'" Colligan said, when asked about the target market of the device. "The iPhone is part of that 5% of the market; we're going after the other 95% of the market."
The device sports a full keyboard for typing text messages and e-mail. It also features a touch-screen that -- while smaller than the iPhone's -- allows users to surf the Internet and manage music files.
Colligan also noted that the Centro has an advantage in that it operates on 3G networks, which make the data applications much faster than the slowed EDGE networks used by many BlackBerrys as well as the iPhone.
The Centro will launch in mid-October with Sprint as the exclusive carrier, though Colligan would not comment on whether the device would be eventually made available to other carriers.
The launch of the Centro comes at a crucial time for the company, which pioneered the smart-phone market with its Treo only to see much of the market taken by rival Research in Motion (RIMM) , maker of the popular BlackBerry line of smart phones.
Devices makers such as Motorola, Nokia and Samsung have also gotten into the market, as has Apple with its much-heralded iPhone, which went on sale in June.
The results have been bruising for Palm, which saw its earnings plunge more than 80% for its fiscal year ended May 31 while sales remained flat for the year.
(END) Dow Jones Newswires
Posted to the site on 27th September 2007
