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By Suzanna Kerridge, 23 July 2002 13:05

NEWS IBM is to resell Palm handheld devices as part of a deal to gain a stronger foothold in the corporate wireless market. Under the terms of the deal, IBM will resell Palm's devices specially configured with whatever WebSphere features corporate customers demand. In addition, Palm will use the WebSphere web services software to build applications for its handheld devices - including the latest Palm m515 colour handheld. Such applications could include instant messaging and the ability to manage and share sales figures, inventory or manufacturing information. There are millions of Palm handhelds within the enterprise, said Letina Connelly, director of IBM's enterprise pervasive computing group. This relationship will ensure those devices can now access enterprise applications across wireless networks using WebSphere Everyplace Access. The deal will finally give Palm the push it needs into the corporate market, said Chris Jones, senior analyst at Canalys. "Palm has a good presence in the retail market and it has good brand awareness but it has always struggled to get beyond individuals buying the product. "Palm needs IBM to get the route to market which it does not have the money to obtain through acquisition," he said. But figures released today by research house IDC show Palm's place in the handheld market is slipping. Shipments have declined 14 per cent year-on-year despite a brief rally following the introduction of its colour products in March this year. Andy Brown, research director at IDC, said the company has experienced considerable erosion that cannot be rectified by the release of new products. "It has been Palm's target over the past one or two years to get into this market but it has proven difficult because of the hard economic environment. "Many IT directors are considering the devices but not implementing them. This market is suffering and it might not pick up until IT budgets pick up at the end of the year or beginning of 2003," he said. However, he claimed the agreement with IBM provides Palm with the corporate know-how it lacked. "IBM has a real legacy in the corporate world and Palm will be heavily reliant on them to provide the corporate customers to drive the product," he said. For IBM, it provides an opportunity to complete its mobile devices portfolio after the failure of the WorkPad handheld device. Brown said: "WorkPad was a fairly half-hearted attempt. But the company is very strong in the notebook arena especially with corporates - the ThinkPad is the most recognised brand in the business world and it has the services structure to back it up."