Handspring will begin selling its handheld computers in retail
stores, the company said today, a significant milestone for the start-up.
Handspring, which was launched a year
and a half ago by Palm co-founders Donna Dubinsky and Jeff
Hawkins, has sold its devices through its own Web site since last September.
The start-up struggled with
e-commerce software glitches and customer
service complaints, with many customers reporting shipping delays and
Handspring has largely straightened out its online sales situation, company
executives say, and has now turned to the more traditional retail sales
channel. Handspring's Visor, along with Springboard add-on cartridges, will
be sold at CompUSA, Best Buy and Staples next week. Handspring had been
expected to enter the retail channel earlier this year, sources have said.
Matt Sargent, an analyst at ARS, concurred that the company has largely rectified its earlier supply issues, but the entry into retail will tax the Handspring's ability to keep up with demand.
"Most (retailers) will pick them up. The question is whether they can supply those channels," he said. The telling challenge will be whether Handspring can keep up with its customers for at least two weeks after the foray into retail, he added. Most likely, the company will limit the number of retailers.
The devices will be sold for $179 and $249 for the Visor and Visor Deluxe
versions, respectively. The Visor Solo will only be sold through the
Handspring Web site. Otherwise, retail pricing will be consistent with
Handspring's own online sales, according to the company.
"Retail is very important for us," said Greg Woock, vice president of North
American sales for Handspring. The Visor and Handspring's own Springboard
cartridges will only be sold online through Handspring's
own Web site, and
not through the online arms of any retailers, he said. "Retail is still
where most products are bought and sold, although the Internet will still be
our primary market."
The Visor is based on the Palm operating system and generally resembles a
Palm device, with the addition of the Springboard expansion slot, which
allows users to easily upgrade the product. Current Springboard cartridges
in the works
include a variety of games, a global positioning system, a digital camera
and a digital music player.
Because the benefits of the Visor are so integrally tied with the
Springboard cartridges, many analysts have predicted the product will
do better in traditional retail stores, where customers can play with each
device and more fully understand the features.
However, only the modules actually made by Handspring, which include backup
storage, extra memory and a game, will initially be available at retail
stores, said Woock.
"The modules are very important, obviously, because they're one of the key
differentiators that we've got," he said, explaining that it will be
virtually impossible to offer all the Springboard cartridges in stores. "The
reality is that there's going to be so many of them by the end of the year,
it's going to be retail Darwinism to see what succeeds.
How many and which cartridges are available is a key selling point--and a
potential hurdle for the company, analysts say. The Springboard feature
clearly differentiates the product from other handheld devices, but it may
difficult to convince retailers to offer more than one or two at most.
Further, the Visor will compete head-to-head for
shelf space against Palm devices and PDAs based on Microsoft's Windows CE
For example, Microsoft's Pocket PC, which is set to be released in wide
distribution on April 19, will include digital music and video support
integrated into each device, unlike the much-cheaper Visor, which requires
the Springboard cards to offer those features. In addition, both the Palm
IIIc and the Pocket PC offer color displays, a feature Visor is expected to
offer in later versions.
"There's going to be a huge market for handheld computing products--that
market has just begun to be penetrated," Woock said, dismissing the argument
that the Visor competes directly with Palm or Microsoft devices. "We're
selling an organizer running the Palm OS, but one that allows you the
ability to extend the hardware or software functionality."
Handspring will continue to sell the Visor and Springboard cards on its own
Web site, although the company has not announced any plans to sell through
other online retailers.