Palm Increases Commitment to China

Collaboration Begins with China Mobile; R&D/Operations Centre to Open; and Treo 680 to Launch

Palm, Inc. (Nasdaq:PALM), a leader in mobile computing, today increased its commitment to China with a three-tiered advance into the rapidly growing market. The company announced the following:

- cooperation with China Mobile Communications Corporation, the world's largest mobile operator, with more than 240 million subscribers;

- the establishment of Palm's first Research & Development and Operations Centre in the Asia Pacific region; and

- the launch of the new Palm(R) Treo 680 smartphone in cooperation with EC Telecom Science and Technology Co., Ltd. (CECT) and Treo 680 distribution partner, Beijing Riverwill Communication Technology Co. Ltd. (Riverwill).

Today's announcements will greatly extend Palm's presence in China and advance the company's goal of worldwide geographic and demographic growth.

The Palm Treo 680 smartphone, a GSM/GPRS/EDGE quad-band world phone, will be brought to market with CECT, certified by China Mobile and distributed by Riverwill. The Treo 680 is slim and compact, yet packed full of features beyond its stellar phone capability, such as email, web browsing, messaging, multimedia, calendar, contacts and more. According to IDC, the China market is expected to be close to 12.1 million data-centric converged devices shipped by 2011, representing a compounded annual growth rate of 30 percent. This presents a tremendous growth opportunity for Palm Treo smartphones.

"We're growing the Palm infrastructure for success in China, an important part of our international-expansion strategy," said John Hartnett, Palm senior vice president, Global Markets. "With a stronger local presence, we believe we can accelerate the success of Treo smartphones across Asia and beyond. And we are thrilled to serve the Chinese marketplace by working with the world's largest carrier, China Mobile."

To meet the growing global opportunity, Palm is establishing its first R&D and Operations Centre in the Asia Pacific region. The Shanghai-based centre will work to accelerate the delivery of next-generation smartphones to mobile operators, partners and customers worldwide; ensure local language capabilities are incorporated into Treo smartphones; and facilitate close collaboration between Palm and its manufacturing partners. The centre will be key to the delivery of new mobile-computing solutions aimed at redefining the smartphone experience through award-winning Treo smartphones.

"The increasingly mobile work force in China is looking for mobile devices that feature superior ease of use and excellent hardware and software integration - all to manage their busy lives," said Wu Zhi Yang, chairman, CECT. "Palm's innovative and easy-to-use smartphone, together with CECT's well-established status in the local mobile-phone market, will provide a competitive edge for Palm and help it lead the development of smartphone trends in China."

"Palm has a legacy of innovation, and we are confident that the team members of our newly announced China Center will play an integral role in the development of new, innovative Palm mobile-computing products," said Mike Farese, Palm senior vice president, engineering.

"We are pleased that the new Palm Treo 680 supports China Mobile PushMail and Mobile Email, delivering email solutions to even more customers," said Mr. Shen Wei Zhong, deputy general manager, Department of Key Accounts, China Mobile Communication Corporation - Palm.