Handspring shares zoom on corporate deal

The handheld computer maker signs a deal with Ingram Micro to expand its distribution network and give its Visors more exposure to corporate customers.

Richard Shim Staff Writer, CNET News.com
Richard Shim
writes about gadgets big and small.
Richard Shim
2 min read
Handspring's shares shot up Tuesday after it signed an agreement with Ingram Micro to expand its distribution network and try to increase sales in the corporate market.

The handheld maker said Tuesday that Ingram Micro, one of the largest distributors of tech products, will begin offering Handspring Visors to selected resellers, which will give the company more exposure to corporate customers.

Handspring's shares were up $3.06, or 24 percent, to $15.88 in afternoon trading.

The agreement expands Handspring's number of outlets from 26, including chain stores Wal-Mart and Target, to 380. Handspring said it will target resellers that can demonstrate "strong execution and expertise in specific corporate segments."

Financial terms of the agreement were not made public.

Analysts say that Handspring has been conservative with its distribution efforts to maintain control over supply. Handheld makers have had trouble keeping up with demand because of a shortage of flash memory and LCD screens.

When Handspring launched the Visor in fall 1999, it was available only on the company's Web site. Handspring began selling its handhelds in retail stores just over 12 months ago.

Thus far, Handspring has focused on the consumer market. The agreement with Ingram Micro should help the company get onto the purchase list of corporations. But Gartner analyst Chris LeTocq said that getting onto lists is one thing, selling to corporations is another.

"Handspring has to start catering to corporations, and this deal with Ingram Micro indicates they must have plans in the works," he said.

LeTocq pointed to the corporate market as the next key growth area for all handheld makers. Palm representatives have said as much, and Palm's recent acquisition of mobile data management company Extended Systems suggests that it is already working toward addressing the needs of corporate customers.

The Ingram Micro agreement comes as Handspring continues its battle for market share with Palm, the handheld leader. Mountain View, Calif.-based Handspring, which uses the Palm operating system, appears to be making small gains on its rival.

Handspring ended February with 28 percent of the U.S. retail handheld market, up from 26 percent the month before. Palm accounted for 59 percent of the market in February, down from 61 percent in January.

Santa Ana, Calif.-based Ingram Micro operates in 36 countries and had sales of $30.7 billion for fiscal year 2000.