RIM, Palm in Pact to Market Wireless E-mail

Research In Motion Ltd. said on Tuesday it had struck a deal with rival Palm Inc. to make its BlackBerry e-mail service available on handhelds and smartphones that use Palm's operating system.

RIM has traditionally offered its e-mail service through its own BlackBerry devices, known for their distinctive thumb-operated keyboards. But the agreement with Palm will allow rival devices that license Palm's Palm OS operating system software to connect to BlackBerry's server.

However, analysts said the deal was primarily a marketing effort -- no actual technology was swapped and no licensing agreements were signed. They said it failed to go far enough to link Palm, the dominant handheld computer maker and RIM, the leader in the corporate e-mail pager market.

"We will work together to jointly market and promote, and the development will be done by RIM," said Michael Higashi of PalmSource, Palm's software unit. He added that the company had no target date for when BlackBerry-like services would be available on Palm OS devices.

Bear Stearns analyst Andrew Neff, in a note to clients, called the announcement "marginally positive" for Palm and RIM, and said it was a first step for RIM in "addressing a large pool of potential licensees for its BlackBerry solutions."

But the deal spotlights the conflict that exists between RIM's continued focus on hardware and its efforts to shift to a licensing model," he said.

Investors also appeared to be unfazed by the announcement. On Nasdaq, shares of Palm climbed 38 cents, or about 4 percent, to close at $10.58, while RIM edged up 5 cents to $16.92.

News source: Reuters - RIM, Palm in Pact to Market Wireless E-mail

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