Handspring launches PDA phone with keyboard

Lucas van Grinsven

LONDON: Handspring Inc. on Monday introduced a handheld computer with a
built-in cellphone on Monday, beating its biggest rivals to what is expected to
be a fast growing market.

Called Treo, the 150-gram monochrome display product will go on sale for
around $600 in January in an English-language version, starting in Britain, Hong
Kong, Australia and Singapore. Other languages will follow in later months.

The Treo is designed for the GSM (global system for mobile communications)
mobile transmission technology prevalent in Europe and Asia, but also used in
the United States. The GSM device would be available in the United States, but
Handspring said it did not plan a version for the dominant wireless networks
there, based on CDMA (code division multiple access) technology.

Whispers about the model began to trickle into handheld computer discussion
circles late last week, prompting a spurt of interest in Handspring shares. On
Monday the stock jumped to a high of $3.35 on Nasdaq in New York, a 40 per cent
rise from Friday's close and up 180 per cent from one week ago.

Makers of handheld computers and cellphones are rushing to introduce new
do-everything mobile devices, bringing back memories of the excitement produced
by the launch of the first tiny mobile phones some five years ago. Now that
cellphones are widely owned, companies hope these new devices, which combine a
phone and a personal digital assistant (PDA), will become the engines of growth.

IDC analyst Kevin Burden said that the compact size of the Handspring device,
which more closely mimics a mobile phone than a PDA, could succeed in wooing
users looking for a combined unit.

"This is in a form factor that may appeal to those people," he
said. "I think this has a really good potential to be a very successful
device for Handspring." With its announcement, Handspring steals a march on
rival handheld computer maker Palm Inc., which last month postponed the launch
of its long-anticipated i705 model, which is expected to be a PDA-phone
combination.

Handspring and Palm, which use the same software but are rivals in hardware,
together have well over 50 percent of the total market for PDAs. They compete
with PDAs using software from Microsoft Corp., Canada's Research In Motion with
its Blackberry devices, and Psion's Symbian.

A color screen version of Trio will go on sale at an estimated $750 next
summer, when Handspring also plans an email service similar to the one offered
by RIM's Blackberry devices.

The Blackberry service, which is a huge success in the US, forwards corporate
email automatically to a small handheld computer. It has just been introduced in
Europe by British Telecommunications Plc's wireless unit O2.

Handspring was founded by key executives who had earlier helped to set up
Palm before it was sold to US Robotics, now a 3Com Corp. company. Handspring has
tweaked the Palm software to improve the phone functions. Consumers will be able
to make calls and send text messages from their address books.

Treo will compete with products that are based on Microsoft Pocket PC
software. Both Japan's Mitsubishi and France's Sagem already sell PDA phones,
although larger and heavier models.

South Korea's Samsung Electronics and British wireless operator O2 have
announced plans for much improved but still relatively big PDA phones, based on
Microsoft's Pocket PC 2002, which will hit the shops next year.

A host of other companies, among which is Japan's Toshiba, have also said
they will launch PDA phones next year.

Return of the keyboard

One Treo version will sport a tiny keyboard, to be operated with thumbs, similar
to a RIM Blackberry device. The other version has the familiar Palm interface
without a keyboard; users write in characters with a stylus.

Handspring Chief Executive Donna Dubinsky, who at Palm helped create a market
for keyboard-less handheld computers and forced an entire industry to follow
that route, reintroduced the keyboard after she saw how popular it was with
Blackberry users, said Bill Holtzman, head of the firm's international division.

"There are two concepts we learned from Blackberry - the keyboard and
push-email," he said, referring to the service of corporate email forwarded
to a mobile computer. Handspring had a 14 per cent global market share in the
first half of 2001, compared with 42 per cent for Palm, according to technology
consulting firm IDC.

(C) Reuters Limited 2001.