Palm finds its color

The first color Palm handheld is introduced, but some users are disappointed with what they see -- or don't see.

A week before its much-anticipated initial public offering, Palm Inc. is putting color screens into its popular handheld organizers.

Palm, of Santa Clara, Calif., Tuesday, Feb. 22 unveiled an organizer that can display 256 colors, its first major new product in a year. The Palm IIIc is a slightly modified version of the Palm III that Palm expects to sell for $449. Palm said the IIIc will use rechargeable lithium-ion batteries that would last for 11 to 12 hours, or two weeks of "normal" use.

By adding color, Palm will catch up to competing products using Microsoft Corp.'s Windows CE operating system. Palm organizers far outsell Windows CE devices, but manufacturers such as Casio Computer Co., Hewlett-Packard Co. and Compaq Computer Corp. have been selling handhelds with color displays using Windows CE for about a year.

"There's a lot of demand for color," said Diana Hwang, an analyst for market researcher International Data Corp., in Framingham, Mass.

Paul Osborne, a Palm product manager, said Palm added color to improve "readability" of its displays. There are "users who found that black and white did not do it for them," Osborne said. The Palm IIIc will come with software to view photos and play games in color, but Palm expects many interesting uses of color to come from outside developers who write software programs that are downloaded onto the Palm.

Palm is in the process of spinning off of 3Com Corp. (Nasdaq: COMS), and expects to conduct its IPO next week. Osborne said there was no connection between the introduction of the color displays and the upcoming IPO.

Decisions, decisions
Analysts applauded Palm's addition of color, but said the company was too tentative. Ken Dulaney of the Gartner Group said Palm is making users choose among three popular features: color on the Palm III, the smaller size of the Palm V and the wireless Internet connection of the Palm VII. Osborne said Palm couldn't find a sufficiently strong battery to make a color display practical on the Palm V, which has been Palm's biggest seller in recent months, or the Palm VII, which already holds a radio and a bigger battery to power it.

Hwang said she was disappointed that individual calendar entries can't be highlighted in a different color. "I expected it to have fuller use" of color, she said.

Palm officials conceded that the color screen won't be easy to see outdoors, where sunlight washes out most color screens. They said they chose the back-lit "active-matrix" display because research showed Palms are most frequently used indoors.