In a move market research analysts say will make or break the company, Handspring released two new products: an expandable entry-level personal digital assistant and an upscale combination cell phone and PDA.
Both devices have full-color screens and are available online.
The lower-end Treo 90 ($299) is a PDA with no voice capabilities. It's slim, tips the scale at 4 ounces, and has 16 MB of memory and a secure digital expansion slot to add more memory or run other applications, such as photo imaging, PowerPoint presentations and Word documents. Unlike any other PDA powered by the Palm operating system, the Treo 90 has a built-in Qwerty keyboard.
"What we've learned is that people really like the keyboard," said Calin Pacurariu, Handspring's Treo product line manager.
Analysts like the Treo 90.
"I think it's attractively priced at $299, and the form factor is very nice," said Todd Kort, an analyst at market research firm Gartner Dataquest. "The screen is very bright. I think with 16MB of RAM and 4-ounce weight, it's a nice, competitive product and will put the heat on Palm with the m515 and m130."
Kort, however, said the device's 160-by-160-pixel resolution screen presented no competition for the Sony Clié, another PDA with a 320-by-480-pixel screen and expansion slot. Nonetheless, he said the Treo 90 was Handspring's best bet to survive in a slumping PDA market.
"They really need that to be a big hit," he said.
Kort and other analysts didn't express as much enthusiasm for the Treo 270, a combination e-mail device, cell phone and PDA that will sell for $499 with a service plan.
"I am a little bit concerned that they've sort of de-emphasized the PDA market while expecting the smartphone market to ramp up quickly," Kort said. "They are in that transition, and that transition is not going as smoothly as they thought it would. They are struggling a bit financially, trying to get through this transition."
Said Sarah Kim, an analyst with market research firm Yankee Group: "We don't have a crystal ball here, but I have a bad gut instinct about their moving into this space. They are underestimating their competition."
The Treo 270 is a clamshell phone that opens up to a full-color screen. It contains a back-lit, built-in Qwerty keyboard and is compatible with the high-speed general packet radio service (GPRS) networks that wireless carriers are building today. While the rechargeable lithium battery's life isn't comparable to that of a stand-alone phone, the Treo 270 gives users three hours of talk time and 150 hours of standby time.
Some of the unique features of the phone include three-way conference calls and an e-mail service, which Handspring sells for $100 a year. Deleting e-mail on the devices, however, doesn't happen in real time. The messages are deleted when users sync the device in its cradle with their desktop PCs.
"The Treo works great as a handheld computer, as well as a phone," Pacurariu said.
While analysts acknowledge that the Treo 270 is a vast improvement over the monochrome-screened Treo 180, they say coverage for the phone will be spotty in the United States, where GPRS networks, which deliver data at up to 100 Kbps, are still rare. It may make more sense to market the devices in Europe, where GPRS networks are more common, Kort said.
Pacurariu says the latest two Treo products will be sold in the United States, Canada and various countries in Europe and Asia.
But as Kim pointed out, less than 1 million combination PDA-cell phones sold last year, and many such devices are available today for under $500 with carrier subsidies.
