Palm cuts price on m505, offers SD card with others

Palm Inc. cut the price of its top model for the first time on Thursday, dropping the price of its m505 by US$50, and at the same time launched a promotional offer including accessories on several other models.

Along with cutting the price of its high-end color Palm m505 PDA (personal digital assistant) to $399, the Santa Clara, California-based handheld maker launched a promotion in which buyers can get a 16M-byte Secure Digital (SD) expansion card and coupons for other accessories with the purchase of an m125, m500 or m505, the company said in a statement.

The mail-in promotion is good for devices purchased between Thursday and Jan. 7, 2002, and includes coupons from companies including Intel Corp. and Hewlett-Packard Co. The offer is valid in the U.S., Puerto Rico, the U.S. Virgin Islands and Canada, Palm said.

The price cut on the m505 is the latest in a long series of cuts by Palm and competing Palm OS device maker Handspring Inc. in a battle to sell handheld devices in an ailing economy.

Palm is also facing tough competition, especially on its high-end devices, from PDAs running Microsoft Corp.'s Pocket PC operating system. Compaq Computer Corp., Hewlett-Packard Co., Casio Inc. and Toshiba Corp. all offer devices running Pocket PC, while Sony Corp. offers its own PDA, the Clie, running Palm's operating system.

A study released Thursday covering the handheld market in Europe said that while Palm's sales dropped 56 percent in the third quarter, competing vendors actually saw an increase in sales. Nokia Corp. sold nearly twice as many of its 9210 Communicator devices as it did a year earlier, while Compaq saw its unit sales increase 81 percent from the year-earlier quarter.

Nokia is now the market leader with 28.3 percent of the market, while Palm's own share dropped to 20.2 percent, according to the study.

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