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Palm eyes messaging
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May 3, 2000: 5:24 p.m. ET
Company's CEO predicts instant messaging will be new 'killer application'
By Staff Writer David Kleinbard
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NEW YORK (CNNfn) - Palm Inc., the company that dominates the market for handheld computers, is working on developing an application that would enable Palm users to send instant messages to each other.
Palm CEO Carl Yankowski told an audience at a Merrill Lynch technology conference in New York that instant messaging will be "the next killer application" for Palm users. Palm (PALM: Research, Estimates) is working on technology that would allow "real-time" messages to be sent from a desktop computer to a remote Palm device and from one Palm device to another.
The Palm CEO did not give a date when instant messaging would be introduced. He also didn't indicate whether Palm is going to use America Online Inc.'s (AOL: Research, Estimates) highly popular Instant Messenger application to power its messaging capabilities.
Since its introduction in May 1997, AOL's Instant Messenger has grown to have about 13.5 million active users. In October 1999, Motorola and AOL announced plans to develop an AOL messaging application to integrate into Motorola's wireless devices.
Separately, Palm's Yankowski said the company's engineers are working on a new model Palm that would enable users to get the same e-mail on their Palm device as they do at their office desktop computer. Palm now has one model on the market that provides wireless Internet access - the Palm VII. However, Palm VII users have to set up an e-mail account that is separate from their home or office e-mail address.
The Canadian wireless device maker Research in Motion (RIM: Research, Estimates) already has introduced a product, the RIM 957, that gives users wireless access to the Web and to the same e-mail that appears on their desktop computers at work. It also has paging and organizer features. As with Palm's popular hand-held devices, the RIM 957 can be synchronized with lists of contacts contained on a desktop computer.
Palm has a 70 percent share of the "personal companion" handheld device market, with 6 million users and 70,000 developers working on creating new software for the Palm platform. The company's revenue rocketed to $564 million in fiscal 1999 from just $1 million in fiscal 1995. Palm is on track to record more than $1 billion in revenue in fiscal 2000.
At the Merrill Lynch conference Yankowski repeated previous guidance that Palm's operating income will range between 8 percent and 12 percent of revenue over the next two-to-three years. The company's operating income was 7.9 percent of revenue in the nine months ended Feb. 25, 2000. 
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Palm Inc.
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