Rivals to Handspring: Bring it on!

Rivals Palm and Microsoft say they aren't threatened by the new PDA on the block.

With only a small amount of fanfare, Handspring on Tuesday officially announced its Visor handheld organiser -- and rivals Palm Computing and Microsoft said they welcome the competition.

Handspring's device, based on Palm Computing's Palm operating system, will offer many of the same features as a Palm handheld. But it will be cheaper and more easily expandable via a hardware slot, called Springboard. The Springboard slot, similar in concept to the slot used in Nintendo's GameBoy, will allow users to install a number of hardware modules, ranging from games to pagers to MP3 players. The modules, measuring about 2 inches by 2 inches, slide easily in and out of the slot. The modules contain all the software needed to operate, so that users do not need to install software on the device itself to get them to work.

Handspring, which will at first only take orders via its Web site, expects to begin shipping Visor in October.

The first Springboard modules available are a modem, 8MB flash memory, a Tiger Woods golf game and a data backup product. The backup module serves to store information such as addresses. The memory module can be used for applications, according to Handspring. The $129 (£80) modem offers 33.6kbit/s speeds. The modules can include their own battery power, if necessary.

Handspring will offer three Visor models. Its Visor Solo model, with 2MB of memory, starts at $149. The Visor, with a universal serial bus cradle, will be priced at $179. The two models will be available in a single colour, graphite. Users who wish to step up to the Visor Deluxe model, priced at $249, will be able to choose from five fruity looking colours: clear (or "ice"), blue, green, orange and graphite. They also receive a leather case. Visor will also support both Windows PC and Macintosh operating systems.

Handspring will release Visor into a market in which the Palm devices dominate. Palm Computing, along with its other licensees, have sold 5 million units so far. And some 15,000 developers are working on applications for the operating system, according to the company. In addition, a number of hardware developers make models and other peripherals for Palm handhelds.

Handspring's Visor may help expand the overall Palm operating system market, but the two companies will compete on some levels, analysts said. Because the two companies are targeting similar users, "I think they're definitely in competition," said Phil Redman, a program manger at Yankee Group in Boston. "There's not much difference between (Visor) and a PalmPilot. (Handspring) is offering similar functionality to the Palm III for a lower price."

Palm Computing officials maintain that the company wins either way -- whether it sells a Palm handheld of its own or Handspring sells a Visor unit based on the Palm OS. Traditionally, however, Palm licensees, such as Symbol Technologies, have targeted different market segments than Palm handhelds. Symbol targets vertical markets with its SPT 1500 and SPT 1700 Palm OS-based handhelds.

Some overlap will likely be the consequence of Palm's strategy of becoming more of an operating system vendor and somewhat less a handheld device maker. The company, however, is also making a greater effort to target the corporate market, which may help limit the amount of overlap between Visor and Palm handhelds.

But to expand past 5 million units, Palm Computing is going to need some help. After all, 5 million units is "just a drop in the bucket" when compared to the 350 million cellular handsets now in use, Redman said. Still, he said, "This is a step in the right direction. Consumers can perceive some functionality in it if were included with a game player or MP3 player. This may just add on functionality to something they may be already interested in purchasing."

Regardless of how the Handspring and Palm Computing relationship plays out, Visor may be an even bigger threat to Microsoft's Windows CE-based Palm-size PC.

But Microsoft doesn't see it that way. "What (Visor) shows, overall, is that the palm-size category is expanding," said Brian Schafer, marketing manager of Microsoft's productivity appliance division. He said Microsoft will target the high end of the market for handheld organisers with an approach that integrates more functionality -- such as colour screens -- into its devices.

"We think that people buy them for an electronic organiser, but then you decide, 'Why can't I carry around some pictures or why can't I play a game?' The answer is you can, because we've built in some of the underlying technology, such as the colour screen," he said. Updates to the palm-size PC platform, including new wireless features, are not far in the future.

The Visor announcement comes just one day after Palm's owner, 3Com, announced plans to spin off Palm as an independent company.