Palm and Microsoft Join to Bring the Palm Experience to Windows Mobile

Verizon Wireless First to Market with New Treo Smartphone

Strategic alliance to accelerate the Smartphone market segment with a new device for mobile professionals and businesses.

SAN FRANCISCO — Sept. 26, 2005 — Mobile-computing pioneer Palm Inc. (Nasdaq: PALM) and software pioneer Microsoft Corp. (Nasdaq: “MSFT”) today announced a strategic alliance to accelerate the Smartphone market segment with a new device for mobile professionals and businesses. Palm has licensed the Microsoft® Windows Mobile® operating system for an expanded line of Treo™ Smartphones, the first of which will be available on Verizon Wireless’ national wireless broadband network. The news was revealed in a press conference with Ed Colligan, president and chief executive officer of Palm; Bill Gates, chairman and chief software architect of Microsoft; and Denny Strigl, chief executive officer of Verizon Wireless.

(L to R): Microsoft Corporation Chairman and Chief Software Architect Bill Gates, Palm, Inc., President and CEO Ed Colligan and Verizon Wireless President and CEO Denny Strigl announce a strategic alliance to expand the Smartphone market with a new line of Treo Smartphones from Verizon Wireless at a press conference in San Francisco, Sept. 26, 2005.

The collaboration gives customers more choices and marks a dedicated effort to deliver one of the world’s most innovative Smartphone solutions on the software platform favored by many businesses. Treo Smartphones combine the hallmark Palm experience of a full-featured mobile phone with e-mail, messaging, Web access1 and organizational software in an attractive, compact design. The New Treo Smartphone takes advantage of the Windows Mobile 5.0 platform in multiple ways, offering Outlook® Mobile, Office Mobile and Internet Explorer Mobile built into the Smartphone, as well as direct access to Exchange Server 2003 for mobile access to information2. In addition, the new Treo will operate with Verizon Wireless’ BroadbandAccess service, the largest high-speed wireless broadband network in the United States. Verizon Wireless expects the new Treo to be available to its customers in early 2006.

“We’ve long believed that the future of personal computing is mobile computing, and our collaboration with Microsoft is a historic step in delivering that vision to a larger market,” said Colligan. “We’re confident customers will see a differentiated Smartphone that delivers our world-class usability on Microsoft’s flexible and robust Windows Mobile operating system. We collaborated with Verizon Wireless first because of its high-speed wireless network and growing footprint of BroadbandAccess cities.”

“This is a landmark alliance that will help businesses remain on the cutting edge of competitiveness,” Gates said. “Demand for accessing information on mobile devices is soaring, and businesses want a low-cost, scalable solution. We’re excited to team with Palm and Verizon Wireless to deliver a winning Windows Mobile solution that connects professionals to their critical information while on the go.”

The Treo Smartphone on Windows Mobile is a CDMA-based phone targeted for the U.S. market and takes advantage of Verizon Wireless BroadbandAccess service on its EV-DO network with download speeds averaging 400-700 kilobits per second. Today, about half the U.S. population, in more than 84 major metropolitan areas and in hundreds of airports across the nation, can access download speeds comparable to DSL or cable-modem connections. Verizon Wireless has been expanding its BroadbandAccess service area steadily since its debut in the fall of 2003.

Microsoft Chairman and Chief Software Architect Bill Gates shows off a Treo Smartphone running the Microsoft Windows Mobile operating system

“The new Treo Smartphone will highlight the speed and power of our BroadbandAccess service,” said Strigl. “The Treo will deliver fast downloading of e-mail and attachments as well as quick access to critical-business information, providing businesses with a great return on investment. Our strong relationships with Microsoft and Palm continue to provide real value for our customers.”

The new Treo Smartphone is powered by an Intel processor and joins Palm’s award-winning family of Treo Smartphones, which includes the Treo 600 and 650, both offered today to Verizon Wireless customers.

The Palm Experience on Windows Mobile

During the press conference, the companies demonstrated the Palm experience now brought to life on Windows Mobile. The audience saw a sampling of Palm’s award-winning hardware design integrated thoughtfully with a rich Palm Software suite including the ability to:

• Contact someone quickly from the Today Screen and choose between home, office or mobile numbers, or select e-mail or SMS. With only two letters entered, a customer can find a record from among thousands of contacts;
• Reach people most often called via photo speed dials visible as a band of images on the Today Screen;
• Decline a call with a friendly SMS, signaling “In a meeting” or “Talking with the boss” instead of simply ignoring the call; and
• Rewind, delete or fast-forward through work or cell phone voice mail with familiar and consistent on-screen icons.

Full product details will be disclosed when the product is available for purchase in early calendar 2006. No plans were revealed for additional mobile operators. Palm indicated that a Treo Smartphone using Windows Mobile based on other wireless technologies was not anticipated to be released earlier than the second half of 2006.

About Palm, Inc.

Palm, Inc., a leader in mobile computing, strives to put the power of computing in people’s hands so they can access and share their most important information. The company’s products for consumers, mobile professionals and businesses include Palm® handheld computers, Palm Treo™ Smartphones, Palm LifeDrive™ mobile managers, as well as software, services and accessories.

Palm products are sold through select Internet, retail, reseller and wireless operator channels throughout the world, and at Palm Retail Stores and Palm online stores (http://www.palm.com/store).

More information about Palm, Inc. is available at http://www.palm.com.

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their potential.

About Verizon Wireless

Verizon Wireless owns and operates the nation’s most reliable wireless network, serving 47.4 million voice and data customers. Headquartered in Bedminster, NJ, Verizon Wireless is a joint venture of Verizon Communications (NYSE:VZ) and Vodafone (NYSE and LSE: VOD). Find more information on the Web at www.verizonwireless.com. To preview and request broadcast-quality video footage and high-resolution stills of Verizon Wireless operations, log on to the Verizon Wireless Multimedia Library at www.verizonwireless.com/multimedia.

1 Within wireless service coverage area only. E-mail, messaging and Web access requires data services from a mobile service provider at an additional cost. ISP may also be required.

2 Requires Exchange Server 2003 and access enabled by IT administrator.

Note: A replay, podcast and written transcript of the press conference will be available starting at approximately noon PDT.

Broadcast Video and Other Materials

Video and photographs will be available from several sources, including the following:

• Palm’s Multimedia Library (www.palm.com/MultimediaLibrary). Preregistration is required to access broadcast-quality video and stills.
• Microsoft’s PressPass Web site (http://www.microsoft.com/presspass).
• Verizon Wireless’ Multimedia Library (www.verizonwireless.com/multimedia). Preregistration is required to access broadcast-quality video and stills.
• Cameras are permitted on-site; an audio mult-box will be provided.
• For broadcast coordinates and inquiries, contact mediarelations@wctv.com or (212) 445-8220.

Palm, Treo and LifeDrive are among the trademarks or registered trademarks owned by or licensed to Palm Inc.

Microsoft, Windows Mobile and Outlook are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.

All other brand and product names are or may be trademarks of, and are used to identify products or services of, their respective owners.

Cautionary statement from Palm: This press release contains forward-looking statements within the meaning of the federal securities laws, including, without limitation, statements regarding the Smartphone market and the timeframe in which new products will be available. These statements are subject to risks and uncertainties that could cause actual results and events to differ materially, including, without limitation, the following: Palm’s ability to forecast demand for its products; Palm’s ability to introduce new products and services successfully and in a cost-effective and timely manner; Palm’s ability to timely and cost-effectively obtain components and elements of its technology from suppliers; Palm’s dependence on wireless carriers and ability to meet wireless carrier certification requirements. A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in Palm’s most recent filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended June 3, 2005. Palm undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this press release.

Note to editors: If you are interested in viewing additional information on Microsoft, please visit the Microsoft Web page at http://www.microsoft.com/presspass on Microsoft’s corporate information pages. Web links, telephone numbers and titles were correct at time of publication, but may since have changed. For additional assistance, journalists and analysts may contact Microsoft’s Rapid Response Team or other appropriate contacts listed at http://www.microsoft.com/presspass/contactpr.mspx.