The Mountain View, Calif.-based company said Tuesday that its first devices, formerly code-named Helix, will be called Zodiac and will sell for $299 and $399. The $299 Zodiac will come with 32MB of memory; the $399 Zodiac will come with 128MB.
The company will begin taking orders for the devices on its Web site in mid-September, said Byron Connell, senior vice president of marketing at Tapwave. The devices should be available by October. He said the devices will be sold in retail stores next year.
"The segment of the market we focus on is entertainment and gaming, which grew 20 percent last year despite the slumping economy," Connell said. "A lot of the disposable income from our audience is going to gaming."
Tapwave will compete in an increasingly crowded market for portable game machines, long dominated by Nintendo'sline, which has sold 120 million units worldwide.
Sony recently announced plans to enter the handheld gaming market with the PlayStation Portable (PSP), a high-end device that will sport advanced 3D graphics and a new optical media format. Sony revealed further details about the PSP at a Tuesday press event in Tokyo, announcing that the game player will use 802.11 wireless networking to connect with other game players and computing devices. The company also said the PSP will run on a central processor similar to the one used by the PlayStation, Sony's first-generation home game console.
Mobile phone giant Nokia is also set to unveil its high-end portable game player, the, in a few months.
The gaming industry is one of the few bright spots in the technology sector, and analysts believe the flurry of new devices may bolster the sagging handheld market.
In each of the last two quarters, worldwide shipments of handhelds have declined more than 10 percent, according to research firm IDC. In the second quarter, shipments were down 10.7 percent to 2.27 million units, compared with the same period a year ago. IDC attributed the decline to sluggish demand from business buyers and consumers. The second quarter is a traditionally slow selling season, but shipments in the handheld market.
Analysts have attributed the steady decline to a lack of innovation. Manufacturers have responded by integrating new capabilities into PDAs, such as, and , as they look to attract new customers.
Tapwave said its new devices are aimed at people in their late teens to early 30s, but 20-somethings are expected to be the core customers.
As, the devices will use version 5.2 of the Palm operating system and will synchronize with a PC and have organizer functions. However, they are primarily meant to be portable gaming devices. The Zodiacs will have a built-in joystick and a color screen that has a resolution of 320 by 480 pixels. They will also have built-in Bluetooth wireless support to let people participate in multiplayer games.
The devices will support handheld versions of games such as "Neverwinter Nights," "Doom II" and "Tony Hawk's Pro Skater 4."
Connell and Peng Lim, both former Palm executives, founded the company in 2001. Several other former Palm executives also work there. Tapwave will work with developers to create games for the new devices, the company said.CNET News.com's David Becker contributed to this report.