Verizon releases Palm Centro

Palm Inc. has reached a deal with Verizon Wireless to sell its $99 Centro smartphone, expanding the audience for a combination cellphone and email device that has been a bright spot in Palm's efforts to turn around its fortunes.

The deal between Palm, of Sunnyvale, Calif., and Verizon Wireless -- a joint venture of Verizon Communications Inc. and Vodafone Group PLC -- will make the product available starting on Friday to Verizon's 67.2 million subscribers, with a two-year contract. Sprint Nextel Corp. began selling the Centro last fall, followed by AT&T Inc. and international carriers. Palm said it has sold more than one million Centros.

In May 2007, Silicon Valley private-equity firm Elevation Partners acquired 27% of Palm in a $325 million deal, and recruited Apple Inc. veteran Jon Rubinstein -- a key player in the development of the iPod and iPhone -- to become Palm's executive chairman. Mr. Rubinstein was heavily involved in Centro during its final days of development.

Centro has helped keep Palm a player in the smartphone business, as rivals such as BlackBerry maker Research In Motion Ltd. and Apple with its iPhone have enlarged their shares of the market. During the first quarter of the year, strong sales of Centro helped Palm expand its share of U.S. smartphone shipments to 13.4% from 7.9% in the fourth quarter, according to research firm IDC.

Palm helped pioneer smartphones, but the company stumbled badly in recent years as it failed to improve its Treo product line to keep up with offerings from competitors. While the Treo is aimed at business users, Palm has targeted Centro at consumers who have never owned a smartphone, and jazzed up its design with models in pink, red and white.

Brodie Keast, Palm senior vice president of marketing, said 70% of Centro's customers have never owned a smartphone and 40% are women, double the percentage of women who own Treos. The version of Centro for Verizon can access the Internet at fast 3G network speeds, much like a new $199 version of the iPhone that will go on sale on July 11. Mr. Keast said the iPhone's heavy focus on entertainment leaves room for customers who want a cheaper device with a physical keyboard.