Big Blue actually made the decision last year but has continued to sell its two WorkPad models because it has them in inventory, IBM spokesman Rick Bause said.
The products are essentially Palm handhelds with an IBM logo on them. The $399 WorkPad c505 is a re-badged m505, while the $329 c500 is an m500 emblazoned with Big Blue's logo.
Bause said the company is no longer actively developing WorkPad products and is focusing on other parts of its computing line as it tries to make its PC business more profitable.
"Each year we take a hard look at our product line to make sure we are investing in the right areas and the right products," Bause said. "These decisions allow us to focus on a streamlined set of product offerings and, more importantly, allow us to differentiate IBM PC products through investments in key technology areas, primarily wireless, security and manageability."
Last year, IBM shipped 180,900 WorkPads, or less than 2 percent of the 11.9 million handhelds sold last year, according to a preliminary estimate from market analysis firm IDC. IDC predicted in a report last month that IBM might stop selling the WorkPad.
"Little more than rebranded Palm V, m500, and m505 devices, the WorkPad line has represented the easiest path for IBM to follow as it has decided whether to be a bystander or a major player in the mobile device world," the market research firm said in a report. "The devices themselves conveyed this corporate indecisiveness to the purchaser by offering little in the way of additional value beyond the IBM brand and the Palm product that formed the core of each model."
By all accounts, sales of the WorkPad were not huge, but the line served an important niche for IBM.
"Was it a significant business?" said Robin Marley, who works in market development for IBM's personal computing devices unit. "It was not a significant product business, but it was significant for our customers."
Marley said IBM will continue to offer Palm-branded handhelds to its larger customers through its Web site.
"We will offer Palms to our enterprises as part of complete solutions," Marley said.
Although IBM is focusing its product-development money elsewhere, the company continues to work on handhelds in its research labs. For example, Big Blue is demonstrating a tiny computer code-named Meta Pad that can serve as a laptop computer, desktop computer or handheld when it is snapped into different modules.
IBM launched its first WorkPad in 1997, based on an early PalmPilot. In 1999, IBM introduced WorkPads based on the Palm IIIx and Palm V handhelds.