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A Palm from the Plains

Palm's smallest licensee, HandEra, will take aim at the big boys with a handheld boasting two types of expansion and a better screen than most rivals.

If you build it, will they come?

That's the question for Palm's smallest licensee, a 40-person Iowa company called HandEra. The company, which until recently was known as TRG Products, plans to announce Monday a Palm OS-based handheld for businesses that has two expansion slots and a screen with a higher resolution than most competitors.

The HandEra 330 is a follow-up to the company's first handheld, which was basically a Palm III with the ability to use CompactFlash memory expansion cards. The new unit is the size of a Palm III but adds a faster chip, a 240-by-320-pixel display, jog dial and double the battery power of a Palm III. Along with a slot for CompactFlash modules, the device accepts the same postage stamp-size Secure Digital cards used in Palm's upcoming m500 and m505.

HandEra expects the $350 unit with 8MB of RAM to go on sale by the end of June, first at Sam's Club outlets and then through resellers, HandEra's Web site and Office Depot.

The entry of the HandEra 330 comes as the industry is already overflowing with products. Palm and licensees Handspring and Sony have all announced new models recently. At the same time, consumer demand is slowing and Palm recently warned that it expects inventory of its older models to swell this quarter.

Still, the folks from America's heartland have added a number of innovations on top of the Palm operating system, such as allowing people to hide the area on the screen normally reserved for entering text via Palm's Graffiti handwriting recognition software. This allows more display room for programs such as maps or e-books. The unit also has a built-in speaker and can record voice messages.

The company acknowledges that it does face a number of challenges, namely the fact that few people have ever heard of it.

"We've been accused of having a stealth marketing campaign," CEO Mike Downey joked in an interview Friday. "The main complaint I get is: (You've got) a great product, but I didn't know you existed."

The company sold tens of thousands of its initial handheld, the TRG Pro, relying heavily on word of mouth. But Downey said the company knows it needs a large advertising budget to succeed at retail with well-heeled rivals such as Palm and Handspring.

In addition, to take advantage of the screen--which has three times more pixels than nearly all Palm-based handhelds--software makers must do a bit of tweaking to their programs. Although HandEra said this is at most a couple of days worth of work, the company also has a very small market presence, which could make the customization work a tough sell.

"I think we've got challenges just because we're the little guy on the block," Downey said.

Still, he said, unlike some features developed by Sony and Handspring, which Palm has the right to fold back into the operating system, his company's innovations are its own intellectual property. But the company would be interested in trying to get Palm to standardize the Palm OS on HandEra's screen resolution, he said.

Sony's newest Clie, introduced in Japan, also features a higher-than-normal resolution screen, although Sony opted for a 320-by-320 pixel screen. That's exactly quadruple the number of pixels in the standard 160-by-160-pixel Palm screen.

Christy Wyatt, who heads of Palm's licensing program, praised the ways HandEra has improved the display, including the flexible Graffiti pad and the resolution.

"The screen itself is beautiful," Wyatt said. "It's really clear. It's really crisp."

However, she said, Palm is still evaluating whether it wants any of HandEra's innovations to become a permanent part of the operating system.

"I don?t think we've made decision either way," Wyatt said.

Although the HandEra 330 lacks the sleek design of the Palm m505 or Handspring's new Visor Edge, Downey said his company has maintained compatibility with its initial handheld and with the large number of add-on devices that were created for the Palm III.

Plus, Downey said, many business computers don't have the Universal Serial Bus ports that are used by Palm and Handspring's latest models, but do have the serial port used by the Palm III and both the old and new HandEra models. (However, adapters are available for the new Handspring and Palm models that let them work with an older serial port.)

HandEra began as Technology Resource Group with four engineers in 1992, offering technology consulting. In 1997, 3Com asked TRG to do some consulting work related to one of the Palm's custom chips. The engineers were smitten with the handheld device, but thought it could benefit from greater memory.

The company came out with a memory expansion card for the Palm later that year and early last year introduced the TRG Pro. Last year, the company also abandoned its consulting efforts to focus solely on the handheld market.

Although Downey readily admits that Iowa is a bit far away from most of the handheld computer world, the company's Des Moines locale has its benefits. Downey said the company has gotten almost all its engineers from Iowa State University, located 30 miles away.

HandEra is banking everything on the success of the new model, but Downey said the company needs only modest results to recoup its costs.

"We don't have to sell millions of units," Downey said. "We don't even have to sell hundreds of thousands to make money on the product."