We recognize that uncertainty regarding Palm's future pricing creates uncertainly for Handspring's near-term sales and margin outlook, and to the extent that we need to respond, we will.

At Handspring, we believe that the future of the handheld industry lies in wireless communication, and we are investing our resources accordingly.

Industry sales have held up better than expected despite a backdrop of economic uncertainty, and we think this trend will characterize all of 2001.

I mean, they sort of refused to come to the table with any incremental capital. They would have loved for us to be acquired — just get their money out and be gone.

Venture capitalists wouldn't fund us because it wasn't wireless.

Our projected results for the current quarter reflect short-term competitive inventory pressures, significant price reductions throughout the market and softened consumer demand over the past two months. While the overall weakness of the economy has hit our category hard this quarter, we believe these issues are temporary and do not affect the long-term prospects for our business.