Prices fall for duo of Treos

Handspring cuts the cost of its black-and-white Treo 180, and Sprint offers a discount to those who swap an old handheld for the new Treo 300.

Aiming to boost sales of its Treo devices, Handspring on Friday cut the price of the monochrome version of its handheld-cell phone combination gadget.

With service activation, the Treo 180 now sells for $349, a $50 drop. Sprint also introduced a promotion that gives handheld owners $100 off Handspring's just introduced Treo 300 when customers trade in their old handheld. The Treo 300 is a color device that runs on Sprint's network, while the Treo 180 is a black-and-white unit that runs on GSM networks, such as those of Cingular Wireless and T-Mobile. The trade-in offer from Sprint runs until Oct. 11.

Although Handspring has pledged that communicators like the Treo represent the company's future, analysts say Treo sales have been lackluster since the devices went on sale earlier this year.

"To date, Handspring's monochrome Treo 180 and color Treo 270 have shown anemic sales," Bear Stearns analyst Andrew Neff wrote in a research note last week.

Neff said that the arrival of the color Treo 300, which runs on Sprint's network, could help sales but also said that it's too early to say for sure. The 300 accounted for 15 percent of Handspring's sales during the second week it was on the market--the most recent week for which sales figures were available.

A Handspring representative said that the price drop on the Treo 180 was a planned cut and that the company expected its color models to be more popular once they reached the market.

Handspring is also readying a software upgrade that allows the GSM versions of the Treo to take advantage of faster, always-on GPRS (General Packet Radio Service) networks. The company has released the software in Singapore and New Zealand but is warning customers outside those areas to wait until the software is made available for their locale. A U.S. version of the software should be ready in the next couple of months, the representative said.

In general, Neff said, the handheld industry should probably see another week or two of decent sales as the back-to-school season winds up, but then sales are likely to be weak until the holidays.