Handspring's Treo challenges BlackBerry
Greg Shirai, product manager, Handspring
In a promised step toward being more focused on wireless communications, the handheld maker announced three devices that combine a handheld organizer, a cell phone and Web browsing. The new combo units are smaller than both Handspring's Visor handhelds and rival combo devices, such as Kyocera's Smartphone.
The Handspring Treo 180, which has a tiny keyboard, and Treo 180g, which uses Graffiti handwriting recognition for text input, have monochrome screens and jog dials that let people scroll up and down the screen quickly. They will both appear early next year and sell for $400 with wireless-service activation. A color-screen model, the Treo 270, will appear in the middle of next year and sell for $600, with activation.
The Treo devices will initially operate on the GSM (Global System for Mobile Communications) network, but a software upgrade will allow the devices to also work with the next-generation GPRS (General Packet Radio Service) networks that allow always-on access to data and e-mail. The company is also working on a CDMA (code division multiple access) version of the Treo. CDMA is more prominent than GSM in the United States.
William Crawford, an analyst at U.S. Bancorp Piper Jaffray, said that although Handspring's upcoming devices work on the GSM network, they are really designed for the always-on capabilities of GPRS. Because of that, Treo sales may be fairly slow until the newer GPRS networks are in place--a process that has begun but could take months or years to become available across the United States.
"They have to have the networks up and running, but (Handspring) doesn't control that," Crawford said.
Another key for Handspring is building strong relationships with wireless carriers in advance of the Treo launch in 2002.
Carriers will have a lot of competing devices to sell next year, Crawford said. "I think that's one of the reasons Handspring came out so early" with the announcement.
However, Crawford said there are downsides to unveiling the Treo devices months before they are ready. For example, it could prompt some high-end consumers to postpone purchases of other products such as Handspring's Edge or Prism, Palm's m505, or devices running Microsoft's Pocket PC operating system such as Compaq Computer's iPaq.
Handspring is working with Visto, which provides remote access to corporate data through handhelds, cell phones and laptops, to allow the Treo to offer, by the spring, automatic delivery of corporate e-mail from a Microsoft Exchange or Internet-based POP3 account.
The e-mail software from Mountain View, Calif.-based Visto will not initially support Lotus Notes, but there are plans for it to support the technology in the future, Visto Chief Technology Officer Daniel Mendez said. The cost of the e-mail service will be determined by Handspring, with Visto receiving per-user fees, Mendez added.
Mendez said the company is working on similar deals with other hardware makers and already has software for devices running Pocket PC.
Handspring shares have risen steadily since Friday, after CNET News.com reported that the devices were on their way. On Monday, shares closed up 59 cents, or 27 percent, at $2.78. That follows a nearly 25 percent gain on Friday.
Information about the Treo line first cropped up in August, when News.com reported that Handspring had received Federal Communications Commission approval for the two wireless devices with black-and-white screens.
However, Handspring didn't intend the information to become public so soon and had the agency temporarily withdraw its approval, thereby making details of the devices no longer publicly available. An FCC official said at the time that Handspring wanted approval to be held until Oct. 15.
Handspring Chief Executive Donna Dubinsky and other executives have said in recent months that wireless communications will play an increasingly important role in the product plans for the company.
The Treo devices mark Handspring's second attempt at a wireless device. The first effort was the VisorPhone, an add-on module to create cell phone capabilities for Visor handhelds. Company representatives have acknowledged that sales of the device did not live up to expectations. Nonetheless, the software development for the VisorPhone laid the groundwork for the upcoming Treo devices.
The VisorPhone cost $299 with service activation when it was released in December and has gone through numerous price reductions and sales promotions. The VisorPhone is now free with service activation with wireless service provider Cingular Wireless or VoiceStream Wireless.
Handspring has stopped manufacturing the VisorPhone add-on and will soon announce a trade-in program in which current VisorPhone owners will be able to upgrade a Treo device, a Handspring representative said Monday.
The upcoming devices can surf the Internet using Handspring's Blazer browser and offer phone functions similar to the VisorPhone add-on. The devices will use a 33MHz Dragonball VZ processor, 16MB of DRAM and rechargeable batteries. Each device has a cover that flips up to act like an earpiece on a phone. The receiver is a microphone located at the bottom of each unit. The new devices do not include Handspring's Springboard expansion slot.
All of the major handheld companies are working to add additional wireless capabilities--both voice and data--into their products.
Research In Motion is also looking to add voice capabilities to its latest BlackBerry e-mail devices, which run on the next-generation GPRS network, in use in Europe. Last month, RIM received approval from the FCC for the U.S. version of the GPRS device. However, RIM has yet to announce plans for a GPRS device in the United States.
The design of the new RIM devices includes a headphone jack, and the gadgets can be made ready to make phone calls with a software upgrade, although RIM must first strike a deal with the carriers on how to split revenue.
"We fully expect voice services to be available in the U.K. at a later date, but we need to wait for BT Cellnet to announce their plans," Mark Guibert, RIM's vice president of brand management, said in an e-mail.