The world's largest mutual fund company, Fidelity Investments, Thursday cut commissions and lowered the minimum account balance on its InstantBroker service that will be an integral part of the upcoming Palm VII.
The latest model of 3Com Corp's popular personal digital assistant (PDA) is currently available only in the New York metropolitan area, but is expected to be launched nationwide later this fall.
"It means you can trade from the hip," Fidelity spokesman Jim Griffin said. Already available by a two-way paging device, InstantBroker is a wireless application that combines stock trading with real-time quotes, news, and financial information.
The application will be "burned into the chip. When you buy the Palm VII organizer, you'll automatically have InstantBroker," he said.
InstantBroker was designed to work with a variety of wireless devices, "so we expect that the application will be used not just on the [pager] or the Palm VII, but several devices ... possibly a smart phone," Griffin said, referring to a cell phone that would provide users with Internet access, email, as well as paging capability.
Fidelity also cut its commissions on the application to US$14.95 from $25 and lowered its minimum for qualifying accounts to $5,000 from $100,000.
Dan Beurke of Gomez Advisors said Fidelity's moves are an attempt "garner more and more of the active trading market and it's a very competitive place to play in.... Fidelity is branded as a mutual fund company, not an online brokerage."
Jupiter Communications analyst Robert Sterling, who predicted in January that online commission prices would continue to decline, said the Fidelity-3Com combination means "there's a growing critical mass of device applications that have significant real world use coming into play."
"Right now, while these devices are restricted to Palms and PDAs, they will be proliferating madly to cell phones, auto dashboards, even home thermostats," Sterling said.
As for the PDA market, "People who have Palm Pilots tend to know a lot of other people who have Palms. One starts trading with their Palm Pilot and the other guy sees it and he starts trading. It's spread in a kind of viral form."
Copyright 1999 Reuters Limited.
