Loses Market Share to Microsoft CE Line

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NEW YORK ( -- Palm Inc., maker of the leading operating system for handheld digital devices, today breaks a $10 million marketing campaign in time for the holiday sales season.

The effort, created by AKQA, San Francisco, and produced by Digital Kitchen, breaks on national cable and network TV and includes in-store, online and radio promotion.

The campaign marks Palm's return to TV after more than a year's hiatus.

Microsoft inroads
Palm, which has enjoyed a commanding lead in the handheld segment, has seen its 70% share erode in recent months, as the Microsoft Corp.'s Windows CE handheld products gain some ground.

The company Nov. 8 announced that CEO Carl Yankowski resigned amid slowing sales and mounting losses. He will be temporarily replaced by Eric Benhamou, the compny's chairman.

Focus on flagship product
The Santa Clara, Calif.-based company is turning its attention away from the global brand awareness efforts of its "Simply Palm" campaign to moving product at retail. The push will focus heavily on new products including the M505, a $399 flagship handheld organizer that comes with a slot for digital memory expansion cards. The cards allow consumers to hold extra data on their device.

"There's definitely a push to move the product more front and center," said Page Murray, senior director of consumer marketing.

Targeting mobile professionals
The TV spots, running through early January, target mobile professionals who are interested in connecting their personal and business lives.

The ads also feature a promotional offer: a free 16-megabyte Panasonic SD card and $250 worth of coupons for other memory products.

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