Handspring explanation adds to Visor confusion

Handspring is trying to reassure hardware and software developers as well as customers about the future of its line of PDAs.
Written by Matthew Broersma, Contributor

Handheld computer maker Handspring is trying to reassure hardware and software developers as well as customers about the future of its line of PDAs, following company's comments last week that it would eventually phase out its current line of organizers in favor of wireless devices. But many developers are finding Handspring's words of comfort more disturbing than the original comments.

The company's co-founder and chairman, Jeff Hawkins, sent an e-mail late Friday to Handspring developers aiming to "clarify our position" on its organizers, saying that developers should have no fear that the product line will suddenly be discontinued. "Handspring remains committed to producing and supporting our organizer products. We believe that there will be a market for organizers for some time to come," he wrote.

Handspring devices use an expansion pack called a Springboard module, which only connects to a Handspring. Springboard module makers would face the loss of their development investment if the Visor line were to suddenly disappear.

The company's focus will, however, shift more and more towards wireless products like the upcoming Treo, which will ship to the UK next month and be offered through the mmO2 wireless network, formerly BT Cellnet.

"What we intended in our earnings call is that because of our strong belief in the value of wireless communications, we are putting more and more of our development resources into our communicator products. This is true. We are very excited about the Treo communicator and are investing heavily in future communicator products," Hawkins wrote.

But other passages in the message outline Handspring's plans to slim down its organizer product line, and gave some the impression that the company is preparing to phase out its organizers.

Hawkins says that the product line will be consolidated into three units, the Visor Pro, Visor Neo and Visor Edge. No mention is made of the Prism, Handspring's more expensive color unit, which could be an indication that Handspring means to focus on less-expensive black and white handhelds. Indeed, some analysts have predicted that Palm OS-based units like Handspring's will be marginalized into the low end of the PDA market, with Microsoft taking over the market for more powerful corporate devices.

Handspring is, however, planning a color version of Treo.

Most ambiguously, Hawkins gives the impression that the Visor organizer line will remain static until it is phased out. "We will continue to manufacture and sell Visor products as long as there is sufficient demand and we are able to build them," he wrote. "It is natural that as demand dictates we may reduce the number of SKUs and the geographies and channels in which they are available." SKU (shop-keeping unit) is a term for a discrete product.

Many developers, commenting on the e-mail on various Web sites, found the message discouraging. "All their money is going towards the Treo. And what better way to calm developers than to hint at new handheld models in that e-mail, which he didn't," noted one developer.

"I don't think this letter is going to fool anybody. The Visor's dead and that's that," wrote another.

Handspring did not immediately respond to requests for comment.

The comments that kicked off the furore came last Wednesday from Handspring chief executive Donna Dubinsky, when she said the company was focusing its efforts on wireless devices like Treo. "We are a company that is transitioning out of the organizer business and into the communicator business," Dubinsky said. "At some point, we will have transitioned out of the organizer business."

Dubinsky also warned that Treo manufacturing would be delayed by a parts shortage, and would not hit shop shelves in the US until March.

Staff writer Matthew Broersma reported from London.

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