Motient, a Reston, Va.-based company that runs a wireless service for Research In Motion's BlackBerry e-mail devices, next week will announce a pager modem and service for Palm's best-selling handheld model, the Palm V.
Motient's MobileModem could give Palm a boost in its plans to transform its organizers into wireless electronic devices and to make inroads into the corporate market. RIM's devices are popular with companies because they allow employees to send and receive e-mail from virtually anywhere.
"The device is clearly aimed at large businesses, where e-mail is the No. 1 application for computing products," said ARS analyst Matt Sargent.
However, Sargent added that writing messages with Graffiti, the handwriting recognition program that is standard with the Palm operating system, will be more difficult than using RIM's tiny keyboard.
While Palm offers wireless service through cellular carriers, Motient's product would open Palm users up to a much larger network. In addition, the modem uses little battery power, allowing Palms to become "always-on" devices.
Palm's wirelessly enabled Palm VII series also has e-mail and Internet access, as does the Palm V through add-on modems. But neither offer always-on e-mail.
The modem deal could also help troubled Motient, which this week cut 25 percent of its workers in an effort to reach break-even cash flow by mid-2002.
As a result of Motient's problems, Research In Motion reported quarterly results Wednesday that included a $23 million write-down of its inventory at Motient, which also resells BlackBerry devices. Canada's RIM also stopped all shipments to Motient.
Motient does not expect to delay the mid-November launch of its product as a result of the recent financial news, a company representative said.
The MobileModem was originally slated to be unveiled Sept. 12 at simultaneous events in San Diego and Atlanta, but the events were delayed because of the terror attacks on the World Trade Center and the Pentagon on Sept. 11.
The company had already begun demonstrating the device to enthusiasts, such as the New England Palm Users Group.
"Without question, we're combining the capabilities of two of the more popular devices in the handheld market," said Motient's director of communications, Don Campbell, referring to the Palm V and the BlackBerry.
The company smells success due to the sheer number of Palm V owners.
Campbell estimates that 5 million people own Palm V devices. And although Palm has stopped production of the Palm V, he said there are still a half-million in inventory.
"The base is still there, so even though Palm has stopped making them, as long as we attract a representative percentage, we'll be happy," Campbell said.
IDC analyst Kevin Burden said that although Palm no longer manufactures the Palm V, the device still has the largest segment of the handheld population.
"They are going after the masses; it doesn't matter that Palm is stopping the V," Burden said. "There are more V's out there than 500's, and it makes sense that they would go after where the majority is."
Burden added that Palm V owners have little reason to upgrade to a new device because newer ones don't have significant enough features to justify an upgrade.
"500 and 505 owners will expect any expansion devices to fit into the SD slot because that's the reason why they bought it," Burden said.
Instead of fitting into a slot, Motient's modem clips onto the back of the Palm V.
Burden said Motient's big draw is its nationwide coverage. Motient's two-way wireless network reaches 220 million people nationwide and covers 99 percent of the 565 most populated cities, according to the company.
The MobileModem will cost $259, or $179 if someone signs up for a one-year service contract. The service costs $49.95 per month. The device will be available in mid-November directly from the company.
Burden called the subscription fees high but added that the price will likely drop. "They all start out high but come down eventually," he said.
An Australian company called WaveNet is manufacturing the modem, according to Campbell. The modem has an internal 1,300mAh lithium-ion battery. When it receives an e-mail, the modem can turn a Palm V device on or notify the owner with a vibrating alert. In addition to e-mail, the MobileModem can access the Web at the relatively slow transmission speed of 19.2kbps.
The company plans to offer similar add-on products for other models of handhelds, starting with Palm OS-based devices.
"We plan to start out with Palm devices...It's a market-share decision," Campbell said.
Campbell would not say which Palm OS-based device the company would support next.
He added that Motient's MobileModem does not use any of RIM's technology or software. But similar to the BlackBerry, the MobileModem can route messages from a desktop PC to the device and allows the owner to send replies and new messages as if they originated on the desktop.
Unlike the BlackBerry, Motient's modem and wireless service do not require installing server software, according to the company.
Although the modem appears to have little competition now, that could change soon.
Handspring and Palm are planning future handheld devices with built-in capabilities similar to the BlackBerry. Handspring plans to launch a device by the end of the year. Palm, which had announced that its device would be out by the end of the year, postponed the device and other wireless plans until early next year.
In addition, start-ups Danger Research and Good Technology plan to come out with their e-mail devices in the near future. Danger Research expects to ship its Hiptop device in the first quarter of 2002. Good Technology is still months away from an announcement.