Palm Line to Tap TI Chip

Planned OMAP-based wireless devices welcomed, but observers concerned about product delays.

Industry observers are pleased that Palm Inc. has chosen a vendor to provide processors as a first step toward next-generation handheld devices, but analysts and users remain concerned about Palms track record on product delays.

Palm announced early in December plans to ship later in 2002 a new generation of wireless devices based on Texas Instruments Inc.s OMAP (Open Media Applications Platform) processors, which will include core technology from ARM Holdings plc. and will run Version 5 of Palm OS.

"This could be a really key product for them, but I dont think Palm can afford another product delay," said Michael Steinberg, president of New England Palm Users Group, in Cambridge, Mass.

Palm is already late with a wireless handheld device based on Palm OS 4, tentatively named the i705. As with previous Palm handhelds, it will run on the Motorola Corp. Dragonball processor, but it will include new e-mail alert features. First due in the middle of 2001, the launch of that product has been pushed back until the beginning of 2002.

By the same token, the industry was hoping that ARM-based devices running Palm OS 5 would come out sooner than the end of 2002. When Palm, of Santa Clara, Calif., announced the relationship with TI, of Dallas, Palm stock dropped, and many analysts attributed this to the due date of the devices.

"Another year?" asked Ken Dulaney, an analyst at Gartner Inc., in San Jose, Calif. "They said to me [originally] that they thought the release would be more aggressive than [the fourth quarter] in [2002]."

The upcoming devices will support TIs OMAP, which enables wireless applications to take advantage of upcoming high-speed wireless networks. At the heart of the processor will be technology from ARM.

Handspring Inc., which licenses Palm OS, has already announced plans to build products based on OMAP, as have cell phone manufacturers Ericsson AB and Nokia Corp.

In March, TI invested $100 million in the development of applications based on the platform, and analysts suspect that TI gave money to Palm, too.

In early December, Palm announced that an anonymous investor had given $50 million to Palm; officials would not comment on whether TI was that investor.

Customers have been champing at the bit for products based on Palm OS 5. "Its supposed to be multitasking, which is a big deal," Steinberg said.

Palm OS 5 was designed to run on processors based on technology from ARM, of Cambridge, England. Motorola and Intel Corp. have been competing with TI to provide processors for Palm OS devices ever since Palm announced plans to build devices based on ARM technology last summer. All three companies manufacture ARM processors.

Gartners Dulaney said TI was a good choice regardless of whether the company invested money in Palm. "The biggest thing in favor of TI was multi- media capabilities," he said. "The other is telephony."

Palm officials said the deal with TI is not exclusive, but it is certainly a coup for TI. "We conducted a clear evaluation," said Angel Mendez, senior vice president of operations for Palms Solutions Group. "TIs wireless capability was very much a strong variable. We obviously looked at cost, too, and TI was by far the most competitive. Theres room for other silicon providers for wireless or nonwireless products in the future. However, clearly the preferred relationship is with TI."

Still, Motorola, of Schamburg, Ill., and Intel, of Santa Clara, Calif., may provide ARM-based chips for other hardware makers that license the Palm OS. Other licensees include IBM, Handspring, Sony Corp. and Symbol Technologies Inc. Palm has been taking steps to keep the hardware side of its business separate from the side that licenses Palm OS. The two sides are due to split into separate companies early in 2002.