1

2

MailMailIAGIAGPresentationPresentation

CalendarCalendarPhonePhone

IAGIAGPresentationPresentation MailMail

CalendarCalendarPhonePhone

3

brought to you by:brought to you by:

evelynevelyn chengcheng •• adeebadeeb huqhuq •• feliksfeliks zarotskyzarotsky

agendaagenda

• a palm story

• product portfolio

• industry players

• bright future

• playing with numbers

• burning desires questions

4

a palm storya palm story

fundamentalsfundamentals

“the future of personal computing ismobile”

“deliver a powerful computing experience in a simple and intuitive

manner”

5

strategic goalsstrategic goals• develop market-defining products

• deliver a great user experience

• provide choice of platforms

• expand global presence

• differentiate through productivity software

• build a brand synonymous with mobile computing

corporate backgroundcorporate background

incorporated asPalm Computing

Acquired byUS Robotics

sold 1st

handheld computer

created PalmSource

initial publicoffering

acquired Handspring

Presented atIAG

1992

1993

1996

2001

2003

2000

2006

6

product portfolioproduct portfolio

the godfather: the godfather: ‘‘palm pilotpalm pilot’’

• pioneer in mobile computing• launched in 1996• small size, high functionality• set the standard for future

generations

7

bringing power to your palmbringing power to your palm• mobile computing solutions

– combine word processing, music and wireless connectivity with portable organizers

– sold through distributors, website and retail outlets– complete range of accessories

handheldshandhelds

• organize life

• stay in touch

• office to go

• multimedia

• fun & games

• and more…

8

mobile managersmobile managers

• the next generation of handhelds

• sleeker, optimized design• 4GB hard drive• expanded software

capability

phones with a high phones with a high iqiq• smartphones

– procreation - the pda and the cell phone

– offspring provides most value by integrating

features

9

treotreo evolutionevolution

Sept 2003 Nov 2004 Jan 2006 May 2006 Oct 2006 Future

Treo 600 Treo 650 Treo 700w Treo 700p Treo 680 Treo 750

smartphonesmartphone featuresfeatures• touch screen

• telephone, calendar, email

10

more featuresmore features……• camcorder• camera• calculator• documents• excel• memos• tasks

• videos• p-tunes• bluetooth• web• contacts• messaging• maps• 100’s more

it has everything!

revenues by segmentrevenues by segment

$0

$400,000

$800,000

$1,200,000

2004 2005 2006

Smartphones Handheld computers

11

revenues by regionrevenues by region

$0

$400,000

$800,000

$1,200,000

$1,600,000

2004 2005 2006

United States International

industry playersindustry players

12

porterporter’’s 5 forcess 5 forces

barg

aini

ng p

ower

of

supp

liers

lowlowthreat of substitutes

highhigh

bargaining power of

customers

highhighthreat of new

entrants

mediummedium

industry industry rivalryrivalry

smart phonessmart phonesrim htc

nokia motorola

13

price comparisonprice comparison

Price

Model

$299-$399

Treo 680

$299-$399

BlackBerry8100

$399-$499$399-$499$399-$499

BlackBerry8700G

Treo750vTreo 700w/p

$299-$450

Samsung 300

Price

Model

$299-$399

Nokia

$Priceless$350-$499$299-$399

Borat 5000HTCMotorola Q

why why treotreo??

• palm O/S• it looks cool• intuitive interface• more functionality• new, cheaper models

14

handheldshandhelds

dell

hp

compaq

why palm?why palm?

• pioneer of the concept• generations ahead

in technology (lifedrive)• more affordable• more value

15

phones/otherphones/othersony ericsson garmin ipod

• single-feature devices are becoming obsolete

• consolidation is a beautiful thing

bright futurebright future

16

market trendsmarket trends• smartphone market growing exponentially

– 49.8% growth from 2Q05 to 2Q06– 569,000 units sold in Q3 of FY 06– 60 percent of 16.8 million PDA shipments worldwide in 2007

• palm O/S system surpassed RIM in 2Q06

• more handhelds and smart phones currently run the palm O/S now

Smartphone Shipments

11.35

17.00

2005 2006

No.

of

unit

s (m

illio

n)

treotreo vs. vs. ipodipod: dollar sales: dollar sales

17

treotreo vs. vs. ipodipod: unit sales: unit sales

more to comemore to come……

• palm realizes non-professional demand– treo 680 released in europe

18

cingularcingular launchlaunch

still more to comestill more to come……

• evolved treo 750, to be launched 2007– continues to target professional users

19

the numbersthe numbers

margin analysismargin analysis

R&D10.3%

D&A1.0%EBIT

6.7%

SG&A16.3%

COGS65.8%

COGS SG&A R&D D&A EBIT

20

relative valuationrelative valuation

Median

Mean

13.3

6.8

61.7

7.7

14.3

10.5

28.2

10.511.7

6.2

49.2

7.7

12.8

8.4

25.3

8.7

HTCKF MOT RIMM NOK DELL HPQ GRMN PALM

EV/EBIT Multiple

EV/EBITDA Multiple

projected upsideprojected upside

13.311.71.11.21.6Median Ratio:

20.417.32.43.03.3Mean Ratio:

63.7%66.9%220.8%240.2%209.9%Upside:

$18.17$19.03$25.43$24.66$25.35Imputed Price:

TTM EBITTTM EBITDA2008 Est. Revenue

2007 Est. RevenueTTM Revenue

17.2%22.8%64.1%59.1%63.5%Median:

$25.37$25.86$49.73$52.72$48.04Imputed Price:

21

recommendationrecommendationshort term: strong buylong term: strong buy