July 03, 2000

KUALA LUMPUR, 3 July 2000 - Palm Inc is willing to honor a one-for-one swap of three faulty models of its popular handheld device if "customers are insistent".

"The cornerstone of the Palm experience is delighting our customers and we will make sure that they are completely satisfied," said Palm Asia Pacific Group Marketing Manager Sharon Ee.

Ee, however, echoed earlier press statements that replacing the units was unnecessary as a diagnostic test and software patch available on its website would "address the problem very thoroughly and effectively."

"The diagnostic test and software patch can be easily downloaded and will completely resolve the issue. Most users will probably prefer the convenience of this approach rather than swapping the individual component or replacing the units," she said.

Palm informed users of the availability of the test and patch last week when component supplier Micron Technology Inc reported faulty 8MB DRAM controllers on the Palm IIIc, IIIxe and Palm Vx models shipped between October 1999 and May 2000.

The buggy memory chips has the potential to cause random fatal errors and destroy data including telephone numbers, to-do lists, calendar and data entries.

Palm sought to downplay the issue by stating that only 3 percent of its products were affected and that all 2MB and 4MB units were free of the glitch.

A spokesperson for the Santa Clara, California-based company in an email response told ZDNet Asia that the problem also affects products of Palm OS licensees and handheld competitors Handspring Inc and TRG Products Inc.

"Palm is working closely and collaboratively with Micron and the Palm licensees and OEMs to share code for the tests, patch and other information to ensure that all customers of all products affected have the best solution possible, " she said.

The spokesperson said Micron had notified Palm about the defective chips as early as May 30, 2000, after it was detected by Des Moines, Iowa-based TRG Products.

Handspring, TRG also affected

On Thursday, Palm made the test and patch available on its website for the Palm IIIc and Palm Vx models, while Handspring and TRG has also made similar tests available on their respective websites.

Ee said the patch will also be made available on an Asia Pacific site soon. "We also anticipate releasing the test and patch for the Palm IIIxe shortly and will notify all customers when this is available. Palm encourages all customers of the Palm IIIxe to check the web site periodically," she said.

Ee was responding to concerns brought up by ZDNet Asia readers and anxious users in posts on newsgroups and user forums. Affected users were skeptical whether a software patch could address a hardware problem.

"What happens when the memory becomes full or nearly full?' asked Palm Vx user David Chok, a consultant at a quantity surveyors firm in Sabah. "I keep all my schedules and more than 400 addresses and contact numbers in my Palm. Can I be assured that nothing will happen, and it won't go haywire when I need it the most?"

Chok, who encountered fatal errors with his unit prior to downloading the patch, also questioned whether Palm's solution of a "work-around" software fix instead of addressing the glitch head-on will affect the device's long-term performance.

Another disgruntled user in Singapore, who owns a Palm IIIc and a Palm Vx, said only his IIIc was affected. However, he had just replaced the unit after discovering a hairline crack on the back of its casing. "Life sucks when you have two rounds of problems for a new product," said the 20-year-old who declined being named.

Palm had reported about 25 such cases of its IIIc color model developing hairline cracks in May and offered to replace the devices.

The user said his unit was replaced in two weeks, but questioned why Palm did not make similar offers this time around. "Palm's initial statement on the patch was very unsatisfactory. Why didn't they tell us outright what the problem was? Solving a faulty DRAM with software patch doesn't sound adequate," he said.

He added that Palm should have "come clean" and offered one-to-one replacement units immediately. "If only 3 percent are affected, why not?" he said, adding the incident had cast aspersions on the company's current quality controls.

Beyond the glitches, Palm users in Asia have also been forced to wait for orders, which the company blamed on shortages of key parts. Palm has indicated the problem is related to its supply side and the rise in production of cellular phones, which contain the same memory and LCD screen parts used to make Palm devices.

Palm is widely regarded as the market leader in the handheld computing device market with IDC's 1999 figures suggesting a 78.4 percent market share. Last week, Palm reported Q4 2000 earnings of a record US$350.2 million, up 101 percent from the previous year and unit shipments of over 1.1 million, with a total user base of 7.1 million.

Palm's international revenues for the quarter, including Asia Pacific and Europe, has risen dramatically and comprises 40 percent of all revenues, with a sequential quarter rise of 61 percent and year-on-year rise of 124 percent. In Asia, the rise was attributed to the ramp-up its Japanese subsidiary Palm Computing KK as a key contributor to revenue growth.

Published in ZDNet Asia