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Handspring to raise price of Treo

The handheld maker says it will raise the price of its combination cell phone and handheld by $50 for consumers who want to use a pre-existing cell phone service contract.

Handspring is following in the footsteps of Apple Computer and raising prices on one of its more talked-about devices, the Treo 180 communicator.

Handspring said in a weekly e-mail newsletter on Tuesday that it will raise the price of its combination cell phone and handheld from $549 to $599 for consumers who buy the device and want to use a pre-existing cell phone service contract.

The price of the Treo 180 will remain $549 without a new service contract until April 2, when the price increase goes into effect. With a new one-year service contract, the device costs $399. Subscription prices for service contracts vary.

For a nationwide plan on the Cingular Wireless network, prices range from $29.99 for 250 minutes and free long distance and roaming to $199.99 for 3,000 minutes and free long distance and roaming.

Handspring's price increase comes on the heels of Apple's announcement last Wednesday that it would be raising the price of its new iMac by $100.

Handspring spokesman Brian Jaquet said that he expects fewer consumers to be affected by the price increase than would be by Apple's price move.

"Most people buy a phone with a new service contract, so we feel that only a small segment of new consumers will be affected by this," Jaquet said.

Wireless carriers generally subsidize the phones when a new customer signs up for service, which is why there are two different prices for the Treo, Jaquet added.

As for why the company increased the price of the phones that aren't sold with a new service contract, Jaquet said it was a move for Handspring's partners.

"As we move into more retail channels, the price increase gives our retail and carrier partners more flexibility to garner the kinds of margins they need to be competitive in this market."

Handspring has been busy recently, announcing new partnerships with distributors and carriers. On Monday, the company announced that its Treo 180 communicators will be available nationwide through retail store chains such as Best Buy, Staples and CompUSA. Last Tuesday, the company announced that it will work with Sprint to develop a new CDMA (code division multiple access) version of the Treo that will run on Sprint's upcoming third-generation wireless network.

The currently available Treo 180 operates on GSM (global system for mobile communications) networks, but a software upgrade will allow the devices to work also with the next-generation GPRS (general packet radio service) networks that allow always-on access to data and e-mail. The Treo 180 runs on the wireless networks of Cingular Wireless and VoiceStream Wireless.