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Palm taps star power
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August 2, 2000: 12:19 a.m. ET
Handheld computing leader extends reach with `Claudia Schiffer Edition'
By Staff Writer Richard Richtmyer
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NEW YORK (CNNfn) - Come this fall, you could have Claudia Schiffer in the Palm of your hand.
That's when Palm Inc. (PALM: Research, Estimates), the world's leading supplier of handheld computers, said the latest addition to its family of products, the Palm Vx Claudia Schiffer Edition, will be available.
The new devices are being developed and marketed in collaboration with the 30-year-old German-born supermodel and PTN Media, which is designing the ClaudiaSchiffer.com Web site.
The Palm Vx Claudia Schiffer Edition will be available exclusively online through that Web site. The company unveiled a prototype of the new devices, which sport a brushed metallic-aqua case, at a conference sponsored by Red Herring magazine in Los Angeles on Tuesday.
 The "Pilot" devices from Palm - formerly a unit of computer networking-gear supplier 3Com (COMS: Research, Estimates) - started to become popular in 1996.
At first, they attracted a strong following among business professionals, who fancied their easy-to-use contact-management and date-book features. Techies also embraced them, abandoning their expensive and clunky Apple "Newtons" and Sharp "Wizards" for the sleeker, less expensive and more versatile Palm devices.
Four years later, Palm remains the handheld computing leader. But it is facing an increasingly aggressive competitor in Microsoft (MSFT: Research, Estimates) which, in partnership with handful of computer makers, is locking in on the burgeoning market with the "Pocket PC."
By tapping into Schiffer's star power, Palm is aiming to extend its appeal beyond its traditional base of customers.
"Our goal is to become as essential in pop culture as we are in tech culture," Satjiv Chahil, Palm's chief marketing officer, said in an interview with CNNfn.com. "Claudia Schiffer is an avid Palm user and recognizes the opportunity to market an elegant, powerful and simple-to-use technology to the fashion-conscious public."
The arrangement with Schiffer marks the first time Palm has used a celebrity to sell its products. And what a way to start.
Dubbed "the most beautiful woman in the world" by GQ magazine, Schiffer has one of the most recognized faces in the world. She currently holds the Guinness World Record for the most magazine-cover appearances, more than 400. Toy maker Mattel (MAT: Research, Estimates) also sells a Barbie doll in her image.
Schiffer's name has been associated with the leading brands in fashion for almost a decade. She currently is the spokesmodel for L'Oreal Cosmetics. She had a similar endorsement deal with Revlon, which reportedly was valued at $6 million over the course of four years.
And by drawing on that kind of star power, Palm is gaining access to a largely untapped market, Chahil said.
"If you look at PCs today, three out of four users are male," he said. "So far, handhelds have followed the demographic profile of PCs. She could double our addressable market."
 But the arrangement with Schiffer is more than just a typical celebrity endorsement deal. The fortunes of Schiffer and PTN Media, in which the supermodel has part ownership, are actually tied to the number of units that are sold.
Although he did not provide any specific financial details, Chahil said Palm's contract with Schiffer does not involve providing a fixed amount of money for her endorsement of the company's products.
"It's a marketing and distribution agreement," he said. "They keep the inventory, they set the prices, and they sell it through the Web site."
"You may see Cindy Crawford's image with a Rolex, but she has nothing more to do with it than lending her image," he added. "In this case, Claudia Schiffer is actively promoting and marketing the products."
Details about pricing for the Claudia Edition Palm Vx were not disclosed.
The standard Palm Vx currently retails for $399. It weighs in at 4 oz and has 8 megabytes of memory. The Claudia Edition will come with a range of the supermodel's favorite add-on software applications on a separate CD.
Tuesday's announcement was the first move in what is expected to be an aggressive marketing campaign from Palm as it fights to maintain its lead position in the market for handheld computers.
Later this month, analysts are expecting Palm to unveil a whole new series of devices, called the Palm M100. Although the company has not yet released details, the M100 devices are reportedly going to be on the low end of the pricing scale at $149 and aimed at first-time users and students.
Prices for Palm's current line of handheld computers top out at $449. For that you can get a Palm IIIc, which features a color screen, or a Palm VII, which has a built-in wireless Internet connection. Meanwhile, prices for the PocketPC devices range between $499 and $599. 
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