Palm CEO says his company not aggressive enough

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BOSTON, Aug 8 (Reuters) – The chief executive of Palm Inc. on Wednesday conceded the No. 1 maker of handheld devices has not been aggressive enough in selling to corporate customers as Compaq Computer Corp. grabs market share in that sector.

“We haven’t been as aggressive as we need to be in terms of marketing (to corporate customers),” Palm CEO Carl Yankowski said at a U.S. Bancorp Piper Jaffray technology conference in Boston.

While Palm (NasdaqNM:PALM – news) continues to be No. 1 in the United States and worldwide based on personal digital assistant shipments, it has lost significant market share since the first quarter of this year, research firm Dataquest Inc. reported on Monday.

Compaq Computer Corp. (NYSE:CPQ – news) increased its market share from the first quarter this year, boosted by success in the corporate market, Dataquest said.

According to Dataquest, Palm’s shipments fell by half in the second quarter, down to an estimated 898,000 units from 1.79 million units in the first quarter. Meanwhile, Compaq’s shipments rose by almost 50 percent to 450,000 in the second quarter from 278,000 in the first quarter.

Yankowski outlined a number of moves Palm will make in the coming months to counter the growing popularity of Compaq’s iPAQ device. For one, he said, Palm’s operating system will be souped up to handle Microsoft Corp.’s Office software.

Also, Palm plans to tap a group of corporate partners to sell Palm devices while they are pitching their own, but larger computer products.

“That’s where you will see most of these leveraged partnerships,” Yankowski said.

Palm already is working with SAP and PricewaterhouseCoopers to develop corporate-specific applications for Palm handheld devices. Yankowski said these customers want wireless mobility, security and access to corporate portals and supply chain data, for example.

Worldwide shipments of personal digital assistants declined 21 percent to 2.79 million units in the second quarter of 2001, Dataquest said

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