[The Palm M500 monochrome and the Palm m505 color handhelds announced today offering mobile Internet access capability.]

Santa Clara, Calif. -- Palm, Inc. (Nasdaq: PALM), a leading provider of handheld computers, today unveiled a new era in sleek, expandable handheld computing -- the Palm(TM) m500 series handhelds. Two new models the Palm m500 monochrome handheld and the Palm m505 color handheld, defined by its vibrant 16-bit color screen pack the power of flexible dual, plug-and-play expansion and mobile Internet access capability into the next generation of the best-selling Palm V handheld product design. A Secure Digital (SD) and MultiMediaCard expansion slot about the size of a postage stamp, a new Universal Connector for hardware add-on modules, and Internet connectivity software make the m500 series handhelds the most wearable, expandable and wireless-capable handhelds on the market today.

Both handhelds feature a new Arctic Mist metallic silver color as well as a new, gentle curve for easier gripping at the products' waistline. The m500 handheld, weighing just four ounces, is scheduled to be available in the United States in late April for an estimated street price (ESP) of $399 (U.S.).(1) International availability is expected in May. The m505 handheld, the lightest expandable color-screen handheld computing product ever designed, is scheduled to be available in the United States in May for $449 (ESP). International availability is expected in June. Outside the United States, users can choose from six languages for both models -- English, French, Italian, Spanish, German and Japanese. Effective today, the popular Palm Vx handheld moves from $399 to $349 (ESP).

IBM intends to announce and ship new versions of its WorkPad, based on the m500 series handhelds, in the second quarter. Palm is an OEM for IBM WorkPads.

"We selected SD and MultiMediaCard technology for our expansion slot because its small size allows us to maintain the elegant, sleek form factor valued by our customers. Users can now easily carry additional memory, video clips, images, applications, games, backup capability and more," said Byron Connell, vice president, Product Management and Planning, Palm, Inc. "Its adoption as a standard [by a broad variety of leading manufacturers], power efficiency, low cost, fast transfer rates and support for I/O make it the best choice for collaboration and sharing among Palm handhelds and other consumer electronics devices."

In addition, Palm recognizes users want remote access to their corporate and personal data and has included Mobile Connectivity software with the m500 series handhelds. Using a compatible data-enabled mobile phone or modem, customers have wireless Internet access readily available for email and web content via their Internet Service Provider.

Dual Expansion Architecture

The Palm m500 series handhelds introduce Palm's dual expansion architecture, which includes an SD and MultiMediaCard expansion slot and a new Universal Connector, which supports add-on modules. These new expansion technologies will be common across future Palm handhelds.

SD and MultiMediaCard -- Small, Flexible and Cost-effective

Palm's postage-stamp-size expansion slot offers plug-and-play use of the industry's smallest expansion formats: SD and MultiMediaCard media. The expansion cards, which range from 8MB to 256MB(2), can be easily carried and inserted in the expansion slot for instant access to applications, content, data storage and backup, images, video clips and more. Because of the broad acceptance of SD and MultiMediaCard media, the cards can be shared among a variety of consumer electronics products as well, such as printers, digital cameras and MP3 players.

Like Palm, more than 200 companies, including Panasonic, Toshiba and SanDisk, have committed to supporting the SD card standard for use in multiple consumer products. More information on the SD Association can be found at http://www.sdcard.org.

More information about MultiMediaCard media is available at http://www.mmca.org . "As one of the companies that led the development of the SD memory card, Panasonic is excited by Palm's adoption of the SD format as part of its expansion strategy," said Arthur Matsumoto, vice president of planning at Panasonic's North American headquarters, Matsushita Electric Corporation of America. "Panasonic believes that consumers will benefit from innovative applications that will result from the enhanced interoperability between Palm handhelds and a wide range of personal technology devices, including those from Panasonic. We expect that the launch of these new SD-capable Palm handhelds will be a major step forward for the SD format as a whole."

The SD format also supports input/output (SDIO) connectivity for future capabilities. With SDIO, manufacturers will be able to miniaturize their technologies to create SDIO modules for scanners, radios, modems, cameras and MP3 players. A number of manufacturers, including Toshiba and Panasonic, have already announced plans to create SDIO cards using technologies such as Bluetooth, a new wireless standard that will enable seamless collaboration among handhelds and other computing products.

This flexible media gives the more than 145,000 developers for the Palm OS(R) platform the opportunity to create and distribute an even broader array of products and software. Plus, the low cost of the media will allow for a broader and more rapid proliferation of solutions for consumers and businesses. For example, businesses will be able to provide employees with up-to-date materials, such as databases, sales collateral and product manuals, in a cost-effective manner.

New Universal Connector -- Superfast USB HotSync(R) Cradle

The m500 series will be the first to include Palm's new Universal Connector, a standard connector and attachment methodology to be common across future Palm handhelds. The m500 series products are bundled with Palm's USB HotSync cradle, providing even easier setup and faster synchronization than previous models. The USB cradle provides out-of-the box connectivity for both PC and Macintosh users. The cradle also supports the Universal Connector and as such will become the standard cradle for future Palm products.

The Universal Connector will allow developers to create common hardware add-ons, such as wireless modems, cameras, GPS receivers and MP3 players, that can be used across a broad variety of future Palm handhelds, giving corporate and individual customers the most flexibility for extending the functionality of their handhelds.

"Palm believes the Universal Connector is an important step toward simplifying the process of selecting expansion solutions for handheld computers because it will lead to all products being compatible with all peripherals," said Byron Connell. "Ultimately, this will provide more choices for consumers, easier maintenance by corporate IT groups, and greater opportunities for third-party developers."

Mobile Connectivity -- Many Ways to Stay Connected

The m500 handheld series offers people several options for keeping in touch. The included Palm Mobile Connectivity software allows customers to connect to the Internet and manage email(3) and Short Messaging Service (SMS) virtually anytime, anywhere using a compatible modem or mobile phone.(4)

The Palm Mobile Connectivity software includes web clipping technology and the MyPalm(TM) mobile portal application. Web clipping technology enables handheld users to access popular web content, such as ABC News, ESPN, CBS Marketwatch and Fidelity, in a format tailored for fast, comfortable handheld viewing. More than 600 web clipping applications can be downloaded for free at http://www.palm.net .

The MyPalm mobile portal application offers users access to a powerful new web-based service that gives them the freedom to manage their personal data and customize their favorite Internet content wirelessly from their Palm handhelds.

For email, the Palm Mobile Connectivity software includes Palm MultiMail(R) software, providing access to personal Internet mail (POP3, IMAP4), such as Earthlink and AT&T WorldNet. The software also includes support for SMS, which lets users send and receive messages and data with a GSM data-enabled mobile phone.

In addition, both the m500 and m505 handhelds in the United States include AOL for Palm OS, which gives AOL members handheld access to AOL email and instant messaging in the office, on the road, or anywhere they can make a connection. Many other web-based email applications, such as Yahoo! Mail and Hotmail, also can be downloaded for free at http://www.palm.net . Both handheld models also come with Palm HotSync Mail, which enables people on-the-go to read and reply to desktop email offline.

Vibrant Color -- Crisp Screens Without Sacrificing Battery Life

The m505 product's new color screen offers bright and easy readability, indoors and out. The reflective screen is designed to support more than 65,000 colors and color-rich 16-bit applications for clear viewing of games, photos and video clips. The m505 handheld Graffiti(R) writing area can be backlit for easy reading in dark conditions.

The new Palm m500 series handhelds use a powerful new lithium polymer battery that easily handles the color screen demands of the m505 handheld. This small, light new technology provides three to four weeks of average use on a single charge.

The m500 handheld uses an enhanced gray-scale screen for a crisp, clear display, with greater contrast for easier readability.

New Functionality -- Faster Operations, Upgradeability, Enhanced Notification

The m500 series handhelds offer a faster processor, the Dragonball VZ 33MHz, for faster handheld operations. Both models have 4MB flash memory, which provides more flexibility and upgradeability, and 8MB of RAM for highly efficient storage of additional data and applications.

Both the m500 and m505 can be programmed for silent alerts. Users can choose between an audible alarm, a vibrate mode or a blinking LED for notification of important events and messages. Also included are the popular Clock and Note Pad applications, first introduced in the Palm m100 series handhelds.

New Palm OS(R) Software -- Native Expansion, USB and Wireless Capabilities

The m500 series handhelds are the first to include the latest version of Palm's industry-leading operating system, Palm OS v4.0, which now includes support for the following:

* Plug-and-play Expansion -- Dual plug-and-play architecture for SD and MultiMediaCard expansion card slot and a new Universal Connector.

* Native USB Support -- New USB-enabled Universal Connector for faster HotSync operations and easier setup.

* Security -- Improved security with new password protection, user-configured automatic lockout, improved data masking and password "hinting."

* Web clipping and SMS support -- Improved Internet access and SMS for mobile and wireless access to web content and data.

* Notification -- Expanded event notification options and "subtle" alarm support for Palm OS applications.

* Time-zone Support -- Improved scheduling across time zones.

* Address Book Dial Command -- Users can dial phone numbers directly from the Palm Address Book when connected to a compatible mobile phone.

Palm Desktop Software -- Enhanced for Windows Users, Mac Software Now Included

The m500 series products come with the latest versions of Palm's popular desktop PIM software for Windows and Mac OS. The Palm Desktop software v4.0 for Windows includes enhanced functionality as well as conduit software for synchronizing with Microsoft Outlook's calendar, contacts, notes and tasks.

The latest version of Palm Desktop software V.6 for Mac OS and the USB HotSync cradle let Mac users get started out-of-the-box.

Bonus Software -- Enhanced Handheld Capabilities

Included with the m500 series handhelds are a number of software applications that can be installed for capabilities that enable users to do more with their handhelds. If bought separately, these bundled products would cost more that $100 (EPS).

* Palm Reader -- Users can read electronic books on their Palm handhelds.

* DataViz Documents To Go 3.0 -- Enables users to view and edit Word documents, Excel spreadsheets and other document types.

* MGI PhotoSuite Mobile Edition -- Users can view and share images and video clips.

* Infinity Softworks powerOne Personal calculator -- Users can perform advanced math and business functions.

* AvantGo -- Provides wireless and offline access from a handheld to content and applications on the web.

* AOL for Palm OS -- AOL members can send and receive AOL email and instant messages.

* Chapura PocketMirror 3.02 -- Synchronizes with Microsoft Outlook calendar, contacts, tasks and notes

PalmPak(R) Content Cards and New Utility Cards

In conjunction with the m500 and m505 handheld introduction, Palm today offers five PalmPak content cards and two utility cards:

Content Cards

* Travel -- Three travel cards are available:

-- United States -- Includes Lonely Planet CitySync Travel Guides for six cities, and time-zone management software; sells for $39.95 (ESP).

-- Europe -- Includes Lonely Planet CitySync Travel Guides for six cities, time-zone management software, a currency conversion calculator, and language translators; sells for $39.95 (ESP).

-- Asia Pacific -- Includes Lonely Planet CitySync Travel Guides for six cities, time-zone management software, and currency conversion calculator; sells for $39.95 (ESP).

* Games -- Bundled with 10 games, including Zap!2016, SimCity, PxBlackjack and Klondike Solitaire; sells for $29.95 (ESP).

* Reference Dictionary/Thesaurus Card -- For quick reference on-the-go, includes Merriam-Webster's Collegiate Dictionary (Tenth Edition) and the Franklin Advanced Thesaurus; sells for $39.95 (ESP).

Utility Cards

* Backup Card -- Users can back up and restore data from their expansion-slot enabled Palm handhelds in seconds; sells for $39.95 (ESP) each.

* 16MB Expansion Card(5) -- Triples the handheld's storage capacity to hold extra software applications, music, databases and more; sells for $49.95 (ESP).

Palm expects many third-party companies to announce SD and MultiMediaCard expansion cards for the m500 series handhelds in the near future.

Accessories and Peripherals -- Fashionable and Stylish Customization

Many new accessories and peripheral options are now available for the Palm m500 series handhelds:

* Cases -- Four fashionable leather case options for the m500 series are available, ranging in price from $24.95 for the most basic to $34.95 for a zippered model with slots designed to conveniently hold SD or MultiMediaCard media. Also available is the Deluxe Leather Carrying Case ($39.95 ESP) for carrying both a Palm m500 series handheld and the Palm Portable Keyboard.

* Palm Portable Keyboard -- Also available today for the new m500 series handhelds is the popular Palm Portable Keyboard, a best-selling collapsible keyboard for typing on-the-go. With its full-sized QWERTY layout, users can take notes and manage email while on the move. This version features the new Universal Connector and sells for $99.

* PalmModem(R) Connectivity Kit -- The PalmModem Connectivity Kit allows 56K dialup data speeds for remote HotSync Mail and access to the Internet for email using MultiMail SE or AOL Mail, and web clipping.

* Travel options -- For users who travel frequently, Palm offers several travel accessories, including a charging kit and serial and USB HotSync cables.

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