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Palm Looks to Keep Pace With New Treo for Sprint

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NEW YORK (Dow Jones) Palm unveiled a new Treo for Sprint Nextel as it hopes to stay afloat in the rising tide of the smartphone market.

Palm has struggled with innovation in its product line over the last few years. As a result, the Sunnyvale, Calif., company, which helped pioneer the smartphone, has been struggling to keep pace with competitors such as Apple and Research in Motion.

The latest model, the Treo 800W, uses the newest Windows Mobile operating system from Microsoft, boasts global-positioning-system and Wi-Fi capabilities, and a connection to Sprint's upgraded third-generation, or 3G, network. Palm hopes the expanded corporate IT capabilities of the new operating system will win over white collar workers.

"You won't find too many devices in the enterprise environment with this combination of features," said Brodie Keast, senior vice president of marketing for Palm. "We feel this is a full-featured business workhorse product."

Continuing in its comfortable relationship with Sprint, the Treo 800W was made available to Sprint customers on Monday for $250 with a two-year contract. The deal to release the device isn't exclusive, Keast noted, and the smartphone is expected to come out later this year for the other carriers.

"They have their own roadmaps," Keast said of the carriers' decision to launch products. "They each make decisions based on different criteria."

He declined to comment on expectations for the new Treo.

AT&T might have been reluctant to begin selling a touchscreen smartphone so soon after the launch of Apple iPhone 3G on Friday, although Palm also began selling an electric blue version of its consumer-oriented smartphone Centro through AT&T on Friday for $70 - $30 less than its normal retail price.

The iPhone has taken the smartphone market by storm and backed traditional players such as Palm onto their heels. As of the first quarter, Palm held 2.9% of the global market for smartphones, compared with Apple's 5.3% market share, according to Gartner Inc.

Keast, however, argued that the iPhone is going after the consumer market, whereas the new Treo is geared toward corporate customers.

"It's a legitimate competitor, but it's not a threat to this particular product," he said.

While the latest Treo represents only a slight step up from prior iterations, many eyes are still on Palm's next generation platform and user interface. Keast declined to provide any updates, noting only that development was on track for release next year.

-By Roger Cheng, Dow Jones Newswires; 201-938-2020; roger.cheng@dowjones.com

(END) Dow Jones Newswires

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