Steady State Gross Margins Should Rise to Approximately 30%
Component costs reflect better leverage of Palm's buying power
Modifications to existing products resulting in lower costs (e.g. packaging costs)
Improvements in reverse logistics operations (returns, warranty, repairs)
New products positively impact mix
Lower in-house inventory leads to faster realization of cost reductions
Lower channel inventory leads to less impact from pricing changes
Increasing Enterprise penetration results in higher-end mix