Handspring Inc, a maker of handheld computers, has unveiled a new line of products that combine the functions of electronic organizers and cellular phones.
Handspring's Treo device will go on sale early next year for US$399 when purchased with a phone-service contract. One model includes a miniature keyboard, while another works with handwriting recognition. A model with a color screen should be available by the middle of next year, for a tentative price of US$599, said Greg Shirai, director of handheld products for Handspring.
Treo arrives after Handspring's first attempt to combine phones and handheld computers, with an add-on cartridge that clips on to its Visor computers, had lower-than expected sales, leading to price cuts and inventory write-offs. Handspring must cope with sluggish demand for phones and computers, as well as competition from phone makers such as Kyocera Corp and Samsung Electronics Co, which are selling products similar to Treo.
"Wireless is definitely the long-term path for handheld computers," said Michael Kim, an analyst with Robertson Stephens, who rates Handspring "market perform" and doesn't own the shares. "The question is whether or not the consumer audience is ready for it."
Treo, in development for more than a year, will let users make calls, send short text messages and e-mails, browse Web sites, and keep track of appointments and addresses. The device is smaller than competing products, an improvement over the bulky VisorPhone, Shirai said.
"What we really learned is that people don't want to compromise when it comes to size," he said. "We put the main priority on making this as small and compact as possible." Because it is smaller, Treo won't work with expansion cartridges that let Visor users listen to music or snap digital pictures. Handspring may ultimately discontinue the Visor line as it focuses more on devices with built-in phone capabilities, Kim said.
"There continues to be a market for expandable handheld computers," Shirai said. "We'll have to see how this market continues to go."
As with VisorPhone, Treo works on the global system for communications cellphone system, which is dominant in Europe. Handspring is working on a model that will function on the code-division multiple access phone system most popular in the US, Shirai said. He declined to say when it will be available.
VoiceStream Wireless Corp, the No. 7 US cellphone service provider, is the only US carrier with a nationwide GSM network.
Handspring is also working on software with Visto Corp that will let Treo users receive e-mail automatically, allowing the product to compete with Research in Motion Ltd's Blackberry device, Shirai said.
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