Handspring to offer Visor in retail stores

Since its debut, the Visor has only been available on Handspring's Web site. The company, founded by Palm Computing co-founders Donna Dubinsky and Jeff Hawkins more than a year ago, has struggled to keep up with demand for the product and has fought persistent technical problems with its e-commerce software.

Following a series of back orders and shipping delays, Handspring essentially missed out on its first holiday shopping season last year.

The line of devices from start-up Visor will be widely available by the last week of February, according to Handspring customer service representatives, handheld enthusiast Web sites and retail market research analysts.

On Internet newsgroups, some Handspring customers have reported that the devices will be available on Feb. 20 in retail stores, although a company representative would only confirm that the transition would happen "soon." It is still unclear which retailers plan to carry the Visor.

Handspring unveiled the Visor last September. Based on the Palm operating system software and including a "Springboard" expansion slot, the Visor was priced starting at $149--cheaper than the least expensive device from Palm.

"Look at how much time they've had to have the supply issues ironed out. They've had six months to get caught up with demand," said Brian Philips, a retail analyst with market research firm ARS. "Initially, it would have been nice if they could have done it by Christmas, but in retrospect it's better they didn't. It could have been a nightmare."

The move into retail distribution is an important one for the young company. Handspring is working to grab the attention of early adopters who were responsible for making Palm such a runaway success, while simultaneously working to mend its initially tarnished reputation for customer service and support.

Visor's entrance into the broader retail channel could have the potential to shake up the handheld market, analysts say.

Palm currently dominates all other handheld manufacturers in terms of market share, although Microsoft is still working to make some inroads with its device in the consumer market. But Handspring's retail move may spur Palm to sharpen its focus on the enterprise market, as well as boost both companies' interest in "smart" cell phones and wireless devices.

Palm has recently cut prices across its product line, partly in preparation for the expected introduction of its first color device at the end of the month. Yet analysts said the move was also an attempt to remain competitive with Handspring.

"Palm understands that if their licensees are a failure then Palm will not expand and become a dominant operating system. At the same time, it's a painful transition," Philips said. "They know that every sale of a Visor is going to mean most likely that Palm will lose a sale."

Microsoft-based handheld devices will be affected even more than Palm by Visor's move into retail, Philips noted.

"Visor's proven they're going to be popular--that's not a huge issue. Retailers are going to conclude they can get a lot of volume out of the Visor, and they might drop Windows CE shelf space."

The move also raises questions about whether Handspring has the necessary infrastructure to support broad channel distribution.

For instance, although many Springboard expansion slots have been announced, it is unclear how many of these add-on cartridges will be available with the Visor in retail stores. Although the company plans to offer different add-on functions like digital music players, digital cameras, global positioning systems and extra memory, many analysts say the Springboard expansion slot is the only noticeable difference between the Visor and the Palm.

"Stocking the Visor is one thing. Stocking all the Springboard modules is another," Philips said, predicting that only one or two modules will make it to stores, with the others being offered directly by the manufacturers or Handspring. "No retailer wants to stock 20 different Springboard modules."