Handspring colour PDA, phone module near

Handspring plans on shaking up the PDA market again this fall with two new PDAs and a cell phone module.

Sources tell ZDNet News that Handspring will be releasing two Visor units 19 October -- including its first colour model -- and a mobile phone module on 25 September. This news follows Sony's entry into the PDA market earlier this month with its Clié PDA.

Both Sony and Handspring license Palm's operating system, which has about 80 percent of the market, according to NPD Intelect, followed by Microsoft's Pocket PC platform.

The introduction of the PDAs comes at a time when demand for the devices is at its peak. Many PDA manufacturers face severe inventory problems as demand for the devices has climbed beyond supply, due in part to the a component shortage brought on by the tremendous popularity of cell phones.

Handspring's first PDA with a colour screen will be the $449 Visor Prism. Palm released its colour IIIc earlier this year, but the display was limited to 256 colours. The Prism will have 16-bit colour screen generating 65,536 colours and will be pushed as a game player. It will be bundled with at least one game.

Competing PDAs from Compaq and HP, based on Microsoft's Pocket PC platform, have been using colour displays for about three years.

The Prism will be based on the 30MHz Motorola Dragonball processor and will come with 8MB of RAM. It will be powered by a lithium-ion battery, which Handspring says charges in 90 minutes. The Prism will use Version 3.5 of the Palm OS and be slightly thicker than currently available Visors.

The second unit will be called the Visor Platinum and will cost $299. The Platinum will also come with a 30MHz Motorola Dragonball processor and 8MB of RAM, but its screen will be monochrome and it will not have rechargeable batteries. Instead it will run on 2 AAA alkaline batteries. It will use Version 3.5 of the Palm OS.

Sources said not to expect a drop in price of other Visor units in Handspring's product line.

Both units will come with Springboard slots, which will take advantage of a new module that Handspring will be announcing on 25 September, called the VisorPhone. VisorPhone will be a Handspring cellular phone module costing $299. The 3-ounce module will come with its own rechargeable battery.

Once the module is plugged in, the software will automatically launch and integrate with the on-board phone book, allowing users to dial straight from their contact list. The phone will also have caller ID.

The earpiece will be in the module, while the receiver will be the microphone built into the PDA. A headset will also come with the module. The module will run on GSM cellular networks and will support short messaging capabilities. It will not be available until November.

Waiting is the name of the game with Handspring's modules. After early promises that a number of third-party modules would be available this year, only about a third are shipping.

Analysts have said that the recent boom in cell phone users is putting a heavy demand on components such as screens and memory needed in PDAs. Palm officials have acknowledged the shortage but have said that the company is shipping record numbers of units. The shortage is likely to last until 2002 when more manufacturing fabs will come online.

Hardware manufacturers using Microsoft's Pocket PC platform are also experiencing a surge in demand for PDAs, as they seem to have hit the right mix of features and portability, but a supply crunch is slowing their growth.

Handspring is the only PDA manufacturer that is dealing with the shortage well, according to analysts. The company limited its distribution to only a few major retail stores in the US, such as Best Buy, CompUSA and Staples, online retailer Amazon.com and the company's home page, allowing the company to better manage its distribution.

The strategy has been working, apparently. It is now in second place behind Palm in PDA market share.

Handspring declined to comment.

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