Palm: 'Little guy' takes on top-dog rivals

HandEra plans to announce a Palm OS-based handheld for businesses that has two expansion slots and a screen with a higher resolution than most competitors.

If you build it, will they come?

That's the question for Palm's smallest licensee, a 40-person Iowa company called HandEra. The company, which until recently was known as TRG Products, plans to announce Monday a Palm OS-based handheld for businesses that has two expansion slots and a screen with a higher resolution than most competitors.

The HandEra 330 is a follow-up to the company's first handheld, which was basically a Palm III with the ability to use CompactFlash memory expansion cards. The new unit is the size of a Palm III but adds a faster chip, a 240-by-320-pixel display, jog dial and double the battery power of a Palm III. Along with a slot for CompactFlash modules, the device accepts the same postage stamp-size Secure Digital cards used in Palm's upcoming m500 and m505.

HandEra said it expects the $350 unit to go on sale by the end of June, first at Sam's Club outlets and then through resellers, HandEra's Web site and Office Depot.

The folks from America's heartland have added a number of innovations on top of the Palm operating system, such as allowing people to hide the area on the screen normally reserved for entering text via Palm's Graffiti handwriting recognition software. This allows more display room for programs such as maps or e-books. The unit also has a built-in speaker and can record voice messages.

Still, the company faces a number of challenges, namely the fact that few people have ever heard of it.

"We've been accused of having a stealth marketing campaign," CEO Mike Downey joked in an interview Friday. "The main complaint I get is: (You've got) a great product, but I didn't know you existed."

The company sold tens of thousands of its initial handheld, the TRG Pro, relying heavily on word of mouth. But Downey said the company knows it needs a large advertising budget to succeed at retail with well-heeled rivals such as Palm and Handspring.

In addition, to take advantage of the screen--which has three times more pixels than nearly all Palm-based handhelds--software makers must do a bit of tweaking to their programs. Although HandEra said this is at most a couple of days' worth of work, the company also has a very small market presence, which could make the customization work a tough sell.

"I think we've got challenges just because we're the little guy on the block," Downey said.

Although the HandEra 330 lacks the sleek design of the Palm m505 or Handspring's new Visor Edge, Downey said his company has maintained compatibility with its initial handheld and with the large number of add-on devices that were created for the Palm III.

HandEra began as Technology Resource Group with four engineers in 1992, offering technology consulting. In 1997, 3Com asked TRG to do some consulting work related to one of the Palm's custom chips. The engineers were smitten with the handheld device, but thought it could benefit from greater memory.

The company came out with a memory expansion card for the Palm later that year and early last year introduced the TRG Pro. Last year, the company also abandoned its consulting efforts to focus solely on the handheld market.

Although HandEra is banking everything on the success of the new model, Downey said the company needs only modest results to recoup its costs.

"We don't have to sell millions of units," Downey said. "We don't even have to sell hundreds of thousands to make money on the product."