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Handspring to transform PDA into a cell phone

The handheld computer maker is finishing work on both a cell phone module and its first product with a color display.

Handspring is finishing work on both a cell phone module for its handheld computers and its first product with a color display, sources say, managing to simultaneously be first and last to market.

On Monday, Handspring will announce the first add-on cartridge capable of turning a personal digital assistant (PDA) into a cell phone. At the same time, sources say, the company will unveil its first device with a color display, following Hewlett-Packard, Casio, Compaq Computer and even Palm to market.

Handspring is expected to release the add-on cartridge by the end of the year and the color version of its handheld computer in mid-October.

The phone add-on will be sold exclusively through Handspring's Web site, a company representative said. Service contracts also are set through providers such as BellSouth and Pacific Bell.

Handspring's first PDA, the Visor, was released about a year ago. The Visor is based on the Palm operating system and offers features and designs similar to Palm's devices, with the addition of the Springboard expansion slot. Intended to allow Visor owners to morph their products into digital cameras, MP3 players and global positioning systems, the cartridges have been slow to hit store shelves.

On Monday, Handspring will release the VisorPhone, a $299 product that essentially turns the Visor into a cell phone. Using the microphone built into the PDA, the cartridge includes software that provides caller ID and integration with the Visor address book.

Handspring has also improved features such as conference calling, missed call identification and speed dial, according to the company. VisorPhone customers will be able to use other applications while talking on the phone, the company added.

The $299 add-on cartridge, which operates on the Global System for Mobile Communications (GSM) network, will not be discounted through service contract subsidies the way many cell phones are today, Handspring said, although future discounts were not ruled out. Regional providers will determine the monthly fees for the phone service.

VisorPhone should ship by the end of the year in the United States. Similar products will available in Asia and Europe next year, Handspring said.

VisorPhone will come with accessories such as a hands-free microphone and an additional rechargeable lithium ion battery. The built-in battery is designed so the phone cartridge and Visor recharge simultaneously.

With the release of the VisorPhone, Handspring is the first company to make good on the promise of convergence between communication and data devices. Acer has announced a cell phone attachment for its PDA, but it won't come out until next year. As cell phones become capable of accessing the Internet and PDAs increasingly add voice capabilities, the line between the two products will grow blurrier, analysts say.

Customer reaction to the phone feature remains to be gauged, however.

"The fact that they're doing it first is interesting," said David Thor, a mobile device analyst with "It will sell well within Handspring users, but people will not use it as their primary voice phone."

The device maker is also getting ready to release its first Visor with a color display. Sources familiar with the product say it is basically a lower-end version of the Palm IIIc, Palm's color device. The Palm IIIc has met with limited success since its release last February.

Around the same time, Good Technology plans to release a plug-in MP3 player for Visors.

Products from HP, Casio and Compaq based on Microsoft's Pocket PC operating system have been available with color displays for some time, but these devices have failed to make significant dents in Palm's market share. Palm holds about 80 percent of the worldwide market for PDAs. Since its debut in retail stores earlier this year, Handspring has taken about a 25 percent market share of PDAs sold in stores.

When it comes to adding features, such as the cell phone capabilities that the VisorPhone offers, the operating system is not as much of a problem, Thor said, because the Springboard cartridge can contain additional software and instructions.