Palm yesterday jazzed up its family of handheld computers with the launch of four new products, as it battles mounting competition from Handspring Inc. and other rivals.
The new products are the m100, a newly designed PDA (personal digital assistant) aimed at first-time buyers; the Palm VIIx, an update to the wireless Palm VII that adds more memory; and two "limited-edition" Palm Vx models that come in metallic shades of blue and gold.
The m100 offers a somewhat radical design shift for Palm: It comes in a black casing that's more curvy than previous units and can be customized using colored snap-on face-plates that are sold separately -- a marketing trick borrowed from mobile phone maker Nokia Corp.
The device has a flip-top cover to protect the screen and is about 20 percent smaller than its predecessors. Palm is aiming the product at first-time buyers such as students and people starting their first jobs, said John Cook, Palm's senior director of product marketing.
A new application called Note Pad lets users create handwritten notes or drawings using a stylus. Being able to enter data without having to know Palm's Graffiti handwriting system should make the device more attractive to less technical users, Cook said. The m100 still uses Graffiti for the other applications, which are largely unchanged from previous Palms.
Other new features include a time and date view that doubles as an alarm clock, and a cable for synching data with a PC, which replaces the HotSync cradle, which can be bought separately.
The m100 is available from Monday priced at $US149, the lowest introductory price yet for a Palm, and will replace the Palm IIIe, which will be phased out, Cook said. The snap-on covers cost $US19.95 each. As well as English, the m100 is also available in French, Italian, Spanish and German, with a Japanese version due in the next month or two.
The m100 should help Palm compete more effectively with upstart rival Handspring, which has bitten into Palm's sales since its Visor PDA went on sale in U.S. retail stores in April, said Matt Sargent, mobile computing analyst with research firm ARS Inc.
"They're clearly losing some market share to Handspring, and it's been Palm's task all along to extend beyond the techies of the world and produce a device that's really interesting for consumers," Sargent said.
Palm's PDAs still lead the market, accounting for as much as three-quarters of devices sold worldwide, by some analysts' estimates. In the narrower U.S. retail market, however, Visor sales have grown quickly and made up about 35 percent of units sold in the second quarter, according to research firm PC Data Inc. of Reston, Virginia.
Because Handspring is a Palm licensee -- its Visor is based on the Palm operating system -- Palm still benefits from the increase in Handspring sales, through licensing revenues and through the proliferation of its Palm OS.
"Even if it means taking a hit (in their hardware sales), the overall strategy is to grow the installed base of people who use the (Palm) software," said PC Data analyst Stephen Baker.
Palm-based devices compete with PDAs based on Microsoft 's PocketPC platform. Criticized at first for being too complex and feature-laden, Pocket PCs have been slow sellers, but the latest wave of devices, particularly Hewlett-Packard's Jornada, have been well received and are better positioned to compete against Palm devices, Baker said.
If Palm is worried about the increased competition, it isn't showing it. The company has planned a party for employees at its Santa Clara, California, headquarters tonight -- a "Billion Dollar Birthday Bash" -- to celebrate the new products and that fact that Palm is set to exceed one billion dollars in annual revenue.
Like other PDA makers, Palm continues to battle shortages of some key components, including displays and memory. Handspring appears to have managed those shortages more effectively than its other rivals, which could account for its strong showing in recent months, Sargent said.
The m100 also starts a new branding strategy for Palm. The Roman numeral system has grown cumbersome, producing unwieldy product names such as Palm IIIxe, Palm's Cook confessed. Future products from Palm will probably carry names such as m150 or m300, for example, while wireless products like the VII will likely carry an "i" prefix, becoming the i100, for example, he said.
Palm also refreshed its wireless Palm VII Monday with a new version called the VIIx. The updated version comes in a deeper shade of gray that's designed to look more "professional," and sports 8M bytes of memory, four times as much as its predecessor.
That allows users to store more data and allows Palm to ship the product with 40 preinstalled "query applications," small programs that let users shop and access news, sports and other information on the Internet. The Palm VII also adds new messaging software from Juno Air, ThinAir Mail, and Yahoo! Mail, allowing users to access a broader range of e-mail accounts.
The Palm VIIx is also available from this week for $US449, while the existing Palm VII dropped $US50 in price, to $US399.
The two "limited edition" Palm Vx models are available from this week to U.S. customers only through Palm's online store, priced at $US399.
New peripherals launched Monday include the Palm Ethernet Cradle, which allows users to sync a Palm to a PC through any Ethernet port in a companywide network. It works with the Palm III and Palm VII series, as well as the IBM WorkPad 20X and 30X handhelds, and is priced at $249.
The company is also preparing a Mobile Internet Kit, which will allow users to connect a Palm V or Palm III to the Web using a cellular phone, effectively turning it into a Palm VII. The Internet kit software will be available from Palm by October, a company official said.
Palm also announced the PalmModem Connectivity Kit, a dial-up system that snaps on to existing Palm III series handhelds. The kit includes a 33.6K bps (bit per second) modem and a set of e-mail applications, and will be available in late August.
The company also cut prices on existing products. Palm's color-display product, the Palm IIIc, has been reduced in price to $399, from $449. Prices remain unchanged for the other products: the Palm Vx at $399, the Palm IIIxe at $249, and the Palm IIIe at $US149.
(Agam Shah in Boston contributed to this report.)Palm, in Santa Clara, California, can be reached at +1-408-326-5000 or at http://www.palm.com/.