Palm released three new handhelds Wednesday designed to capitalize on the successes of its popular Zire and Tungsten product lines.
Adding features without raising prices, the Tungsten T3, Tungsten E and Zire 21 could help the company turn a profit by the end of the year, analysts said.
"They weren't that far from profitability in the last quarter, even if it wasn't that great of a quarter for them," said Todd Kort, an analyst with Gartner Dataquest. "I think they will be profitable this quarter."
Palm has racked up heavy losses since the dot-com collapse a few years ago. About a year ago, it took steps to reinvigorate its business. The company's hardware division parted ways with PalmSource, the software side of the company, and it scrapped all of its handhelds.
After returning to the drawing board, Palm introduced two popular new products: the Zire (for first-time PDA owners) and the Tungsten (for the higher-margin business customers).
Continuing with the series, Palm has introduced the Zire 21, a look-alike of the original Zire. The new device has four times as much memory – 8 MB – and the most recent and fastest operating system, Palm OS version 5.2.
Palm has kept the price low, a major selling point of the Zire, which sold more than a million units in a six-month span. At $100, the Zire 21 could fly off the shelves like the original Zire, although first-time buyers may continue to snap up the old PDA, which will now sell for $80 until Palm clears the inventory and phases out the product.
"It is (a) considerably enhanced relative to the original Zire," Kort said. "Still, it has no backlight and it still has a monochrome display. But for 99 bucks what can you expect?"
Despite steeper price tags, the new Tungsten T3 and Tungsten E may prove enticing for business users who want a flashy, do-it-all handheld computer.
The Tungsten T3, a compact silver 64 MB device, slides open to reveal a bright, full-color screen. Unlike previous Palm handhelds, the device does not have a designated area at the bottom of the screen for graffiti writing, which gives the user "50 percent more display area than any other Palm handheld," said Andrea Johnson, Palm's senior product manager.
Instead, Palm developed a thin toolbar for the handheld that lets users check the time, memory and battery life. They can adjust the brightness of the screen and turn off the Bluetooth wireless capability to save power. Also unique to Palm-powered devices, including the formidable Sony Clie, is an option that makes it possible to switch images instantly from landscape display to portrait style and vice versa.
As for its "menu" options, the Tungsten T3 has an MP3 player and a multimedia player for video clips. Palm has also updated the software for its personal information management system, giving users more fields to input multiple addresses, e-mail accounts – even someone's birthday. The Tungsten T3 is retailing for $400.
The only pitfall to the Tungsten T3 is that it doesn't include Wi-Fi Internet access, said Sam Bhavnani, mobile computing analyst for the market research company ARS. But Bhavnani pointed out that customers can buy a Wi-Fi card for the secure digital expansion slot on the device.
The Tungsten E is a scaled back version of the T3. At $200 it's comparable to some of the popular Dell and Hewlett-Packard pocket PCs. Unlike the T3, the Tungsten E has only 32 MB of memory, an infrared port rather than Bluetooth, no digital camera and less screen space because it includes the graffiti writing area of previous Palm devices.
Nonetheless, it's a robust device for the business user at an affordable price, said Kort, who predicted it will "solidify Palm's position in the lower end of the market."
With a market share of 38 percent, Palm is the world's largest PDA manufacturer, Kort said. As of Tuesday afternoon Palm stock (PALM) fell 24 cents to $19.57 a share.
