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3/24/2006
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Strong Earnings Show Palm Is On A Roll

Quarterly profits jumped from $4.4 million a year ago to $29.9 million, while revenues increased 36% to $388.5 million.

BlackBerrys don't rule the entire wireless world, and Palm has proof. The maker of smart phones and PDAs reported soaring profits this week and gave most of the credit to sales of its popular Treo smart phones.

Palm reported revenue of $388.5 million for the third quarter of its fiscal year, which ended March 3, up 36% from the same period a year ago. Net income was $29.9 million, compared to $4.4 million in 2005.

Palm attributes the growth to sales of its Treo smart phones, particularly the Treo 700w, which runs Microsoft's Windows Mobile 5.0 platform, and the Treo 650, which runs the Palm OS. Carriers and other distributors reportedly sold 569,000 smart phones in the third quarter, up more than double the sales of a year ago.

The Windows Mobile platform lets Palm better compete for business customers against the Blackberry, which is the leader in the business market. It comes with "push" E-mail like the BlackBerry, but doesn't require additional middleware as does the BlackBerry service. "We see more enterprise customers welcome us on the Windows Mobile platform," says Joe Fabris, Palm's director of wireless marketing.

Palm hopes to build on the gains with new products. It plans to come out with three more Treo-type devices this year. Fabris wouldn't provide additional details, but said Palm will take advantage of third-generation cellular networks that wireless carriers have built out. That may mean more business-class devices with significantly faster Web browsing speeds.

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