Palm adds new handhelds to growing market

Palm also announced new contact partners, including Amazon and eBay, for the Palm VII and cut prices on existing models.

As reported earlier, the 3Com subsidiary--which is due to be spun off into an independent company by the end of the year--today introduced the Palm VII and its complementary wireless Internet service nationwide.

3Com introduced the Palm VII last December, but wireless features were only available in the New York City area.

As first reported by CNET News.com, Palm also unveiled the Palm Vx, an upgraded version of its slim Palm V.

Both devices are available now. The Palm Vx Special Edition is $449, and the Palm VII is $499, $100 less than its limited introductory price.

3Com dropped the price of existing models: $369 for the Palm V, down from $449; $299 for the Palm IIIx, down from $369; and $179 for the Palm IIIe, down from $229.

The new products come at a particularly momentous time for the soon-to-be independent company. Although Palm is still far and away the most popular handheld computer by almost any count--including market share, units shipped, or number of third-party software developers--the company faces more competition now than at any time in its existence.

Just today, Psion said it plans to start selling the "Revo," a new handheld this month that is smaller than any of its current models, taking direct aim at Palm.

In the last month, start-up Handspring, formed by Palm's cofounders, has generated buzz and good reviews for its Visor handheld, which is based on the Palm operating system. The Visor packs a particularly potent punch: The device can be upgraded to add MP3 playback, wireless connectivity, digital camera functionality, and more. The Handspring device also will be priced lower than any existing Palm.

In addition, Microsoft's scaled-down Windows CE operating system is expected to be revamped and become more competitive early next year. Microsoft and its hardware partners have been pushing handhelds featuring Windows CE, but so far the various devices have not made a significant dent in Palm's popularity.

Cell phones and interactive pagers also are increasingly offering applications and features similar to those available on digital organizers.

Palm has fought back by flooding the market with new devices. In the last year, the company has released the Palm III, IIIx, IIIe, V, and now VII and Vx. All have the same operating system but come with different bells and whistles.

The strategy may be paying off for Palm, which dominates the retail handheld market, according to PC Data. Palm V topped the retail market in July, with an average sales price of $415. The 2-MB Palm III followed at $211, just ahead of the 4-M Palm at $348. The Palm Pro, at $105, and the $98 Casio PV-200 rounded out the top five.

Palm's next market play is wireless. The Palm VII, which resembles a Palm III device with a wireless antenna, was introduced in New York this May for an estimated retail price of $599.

The Palm.net wireless Internet service, which offers content from selected providers through Palm's proprietary Web clipping technology, had been criticized for its preliminary pricing scheme and limitations.

Today Palm added several service plans and access from 260 U.S. cities.

Palm.net is available for $9.99 per month for approximately 80 transactions, $24.95 for 240 transactions, and $39.99 for 480 transactions. The service also supports email and Internet messaging.

3Com also introduced more than 100 new content providers, including Amazon for shopping services, eBay for auctions, and Fidelity Investments for financial transactions.

Palm.net will also offer content from the Wall Street Journal Interactive Edition, UPS, ABCNEWS.com, Bank of America, ESPN.com, E*Trade, Fodor's, MapQuest, MasterCard, Merriam-Webster, Moviefone, TheStreet.com, and others.

Palm.net content partners prepare information in a query-response form, allowing Palm VII users to access the information they need with minimal interaction with the Internet itself. Palm executives have said previously that this type of pared-down service is necessary to optimize Internet content for such a small device, but it is a burden on Web publishers who have to repackage their content.

Meanwhile, the Palm Vx, based on the Palm V slim design and enhanced display, significantly expands the memory, from 2MB to 8MB. In addition, the Palm Vx is expected to run on a faster processor and revamped operating system and synchronization software.