Palm, Texas Instruments hook up on PDAs, 3G

Palm Inc. has reached an agreement to integrate new wide-area networking chips from Texas Instruments Inc. into its next-generation family of handheld computers. It's a move analysts said Palm needs to make in order to retain its viability in the market it created.

Santa Clara, Calif.-based Palm said that Dallas-based TI will provide it with a digital signal processor and chips designed to work on the Global System for Mobile Communications (GSM) cellular phones widely used in Europe and by an increasing number of U.S.-based carriers, Tom Bradley, Palm's executive vice president and chief operating officer of the company's solutions group, said in a statement.

The deal with TI will "accelerate the convergence of wireless voice, multimedia and data," he said.

Craig Mathias, an analyst at Farpoint Group in Ashland, Mass., said Palm needs a product that integrates cell phone data capabilities in order to keep pace with Mountain View, Calif.-based rival Handspring Inc., whose Treo cell phone and organizer family of products will be available next year.

"This is Palm's way of responding as quickly as possible to the Handspring challenge," he said.

Mathias added that Palm's intention to focus first on the GSM market "makes sense because there are 600 million GSM users," primarily in Europe. But, Mathias said, a number of U.S. carriers have also embraced the GSM standard, including AT&T Wireless Services Inc., Cingular Wireless and VoiceStream Wireless Corp.

Palm didn't say when the new products incorporating the TI chips would be introduced. But Mathias predicted it would be within a year.

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