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Above is a link to an article in the February 13 New York Times business section by Lawrence Fisher regarding the prospects for the upcoming Palm Computing IPO and the merits of investing in 3COM prior to the IPO. There were several comments which I thought might be of interest to readers of this board.

"Geoffrey Moore, president of Chasm Group, a consulting
firm, called Palm 'the gorilla in the PDA category of
nonwireless extensions to Windows PCs.'"

"There are 435 million PCs in the world, but Intel is
saying that by the end of 2001 there will be one
billion devices connected to the Internet," said
Michael Murphy, editor of the California Technology
Stock Letter. "There are only going to be 600 million
PCs by then, so that leaves 400 million other things,
and a lot of those will be hand-held devices.
Everybody except Microsoft doesn't want Windows CE to
own the world, so they've consolidated around Palm in
a remarkable way."

In addition, Fisher states that Palm commands 70% of the PDA market.

He quotes estimates of year 2000 revenue to be $1.2 billion. Based on 3COM's sales breakdown from their webpage, I found '98 revenues to be 270 million and '99 revenues to be 580 million. While clearly rapid growth, I don't know if this meets the criteria for a hypergrowth market.

He briefly mentions Handspring, but does not comment on the implications of licensing on Palm revenues. Personally, I think it was a wise move given the initial popularity of the innovative Visor. It should help establish the Palm OS as the dominant platform vs. the competing Windows CE.

I would appreciate any comments regarding this article and where people see Palm as far as GG strategy is concerned.


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