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PalmOne continues with retail strategy

Pursuing a strategy that has brought mixed results for hardware makers, the handheld specialist opens its 11th retail store, this one at the Philadelphia airport.

Pursuing a strategy that has brought mixed results for hardware makers, PalmOne on Friday announced the opening of its 11th retail store.

The store, at the Philadelphia International Airport, will sell PalmOne's Zire and Tungsten handhelds and Treo smart phones, the company said. PalmOne, which launched its retail intiative in October 2002, now has outlets in malls and airports in five states: California, Maryland, Massachusetts, New Jersey and, with its new store, Pennsylvania.

Selling devices through branded stores has emerged as a new distribution channel for technology companies, but the track record is mixed.

In February, Apple opened its latest stand-alone store in San Francisco, as part of its strategy to expand the market for its Mac, and Sony has plans to open retail stores in the top 10 metropolitan markets in the United States. Meanwhile, Gateway shut down its retail stores, after it acquired eMachines.

PalmOne will not be operating the stories by itself, however. The company said it will provide the design concept, special furniture, images and fixtures, while contract operators hire and manage store staffs.

"The surprise of seeing and interacting with our products in open-air mall settings or attractive airport locations is working," John Hartnett, a vice president at PalmOne, said in a release. "Half of our PalmOne store customers tell us they bought on impulse, and we're attracting an excellent mix of new clientele and loyalists."

According to market research company IDC, handheld shipments dipped in the first quarter. PalmOne remained the market leader, though its share dipped to 36.1 percent from 39.4 percent.

The device maker said it hopes to reach out to new users who may not be shopping on the Net or in high-technology stores.