E-tail giant Amazon.com announced today that shoppers will be able to use 3Com Corp.’s Palm VII electronic organizer to make purchases on its Web site.
Amazon.com’s move coincides with 3Com’s announcement that it is cutting the price of its Palm VII — which goes on sale nationwide today — from $599 (US$) to $499. 3Com has also cut deals with eBay, Inc. and online brokerage Fidelity Investments.
Despite the fact that Palm VII users will be able to connect to these Web sites, they will not be able to surf the Internet. The Palm makes use of technology known as “Web clipping,” which allows users to connect only to specially-formatted sites. However, users of the device will be able to receive short e-mail messages.
By offering access to users of wireless devices, industry observers feel that Amazon.com is wisely positioning itself to cash in on a burgeoning market.
According to research firm Dataquest, worldwide sales of such handheld devices are expected to skyrocket to 5.7 million units in 1999 — a 47 percent increase over 1998. The market is also projected to grow more than 30 percent through 2003, when sales are predicted to reach 21 million units.
In fact, the Seattle, Washington-based Amazon claims that it purchased closely-held software maker Convergence Corp. for $23 million in stock earlier this year largely to help make its Web site accessible to other wireless devices in the future.
Additionally, Amazon.com has forged agreements to make its e-commerce site available to products developed by Motorola,Inc. — the number two cell phone maker — and privately-held software maker AvantGo, Inc.
Some analysts point out that this latest move by Amazon is part of an orchestrated effort to raise consumer awareness of its site for the holiday shopping frenzy, which is expected to rise sharply over last year. Just last week, Amazon.com’s stock soared after it announced zSHOPS, a new online mall program that lets e-tailers of all sizes set up shop on Amazon.com’s site.
While the consensus among industry experts is that Amazon.com’s entry into the wireless world is a good move, they also feel that it has possible pitfalls.
For instance, while the Palm application will allow users to check on the status of their auction items on Amazon.com’s site, they will not be able to make bids.
There is also the fear that the Palm IV may still be too pricey for the average consumer, even at its reduced $499. Some industry observers also think that the Palm’s applications are too consumer-oriented to attract business users.
Shares of Amazon.com (Nasdaq: AMZN) fell 2 11/16 to 77 1/4 on Friday.