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In Taiwan, coming to grips with handhelds

A stroll through the Computex trade show demonstrates that Palm's troubles have not soured Taiwanese computer makers on the potential of the handheld market.

TAIPEI, Taiwan--Palm's troubles have clearly not soured Taiwanese computer makers on the potential of the handheld market.

A quick stroll through the booths at this week's Computex trade show here revealed an array of companies devoted to making new types of handhelds, as well as keyboards, cases and other accessories for the market-leading Palm and Handspring models.

Although operating systems from Palm and Microsoft dominate the world market, many of the new handhelds on display here use either Linux or one of two local operating systems capable of recognizing both Chinese and English characters.

Linux was the operating system of choice for First International Computer, which showed off a handheld with a built-in Bluetooth chip for exchanging data wirelessly with other nearby electronics.

Among the many companies showing off Chinese-language personal digital assistants was Aplux, which offered a low-end, Palm-like handheld capable of bilingual operation. Until now, the company has focused on the local market, offering two different Taiwanese operating systems. However, a company representative said Aplux would like to start selling the device in the United States by August--and for about $95.

"We must have price differentiation from Palm," said Aplux representative Sam Hsaio.

There were also a number of products being shown using Microsoft's operating system, including one from MiTac International.

As for Palm, its big presence comes courtesy of Taiwanese electronics heavyweight Acer, which recently licensed the Palm operating system and said it would bring out a model later this year that offers wireless Internet access as well as a Chinese-language version of the Palm OS, which Acer is helping create.

An Acer executive said the company remains confident in the handheld leader, saying Palm's recent problems, such as an inventory glut and slowing sales, are just typical of the bumps that companies face, said Jim Wong, Acer's vice president of new business development.

"Acer is a 25-year-old company," he said. "The longer you live, the more problems you go through."

Acer itself is facing a downturn in sales of its own brand of goods and the challenge of spinning off the part of its business that manufactures goods for other computer makers such as IBM.

The company has said it hopes to make the Palm device the center of a new mobile data business. Acer prominently featured a mock-up of the Palm handheld in its booth at the show. Wong said what matters to Acer is that Palm's operating system is mature enough, which Wong says it is.

The global economic slowdown has also had an impact on local purchases of PDAs. Although they can be seen in use on Taipei's subway, sales of Palm and other handhelds has been slow in the past few months, according to a salesman at T-Zone, one of the city's main computer stores.

A number of factors are to blame, he said. In addition to a sluggish economy and what is traditionally a slow season for electronics purchases, many of the newest models from Palm, Handspring and HandEra haven't yet arrived on store shelves.