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New iPaqs take high road, low road

Hewlett-Packard plans to debut two iPaqs next week: A slim model that will take on Dell at the low end of the market and a double-duty Wi-Fi and Bluetooth model for the high end.

Hewlett-Packard plans on Monday to introduce two iPaqs: One the smallest, most affordable iPaq yet and the other a deluxe model with fingerprint recognition and two forms of wireless connectivity.

The iPaqs, which debut just as Dell Computer is gearing up to enter the handheld market, offer a new high end and a new low end to HP's line-up. The middle of the market will be served by existing HP models.

As previously reported, the low-end model is far slimmer and lighter than previous iPaqs. The iPaq Pocket PC h1910 will sell for $299, in line with a new handheld from ViewSonic. However, it is still considerably more expensive than a low-end Dell device that will debut next week for $199 after rebate. A slightly more powerful Dell model will sell for $299.

While Dell may have the edge on price, HP's new slimline iPaq has an advantage in its compact design, said Cindy Box, a marketing director at HP.

"Size matters," Box said. "It really does in this market. It's more than the price alone."

IDC analyst Kevin Burden said that the Dell models and HP's h1910 all have their advantages.

"The iPaq name and styling has sold," Burden said, referring to the early popularity of the design. Dell, he said, lacks experience in the market, but "is playing a pricing game." In addition, Dell is offering faster processors in its handhelds.

Box said that HP plans to follow the h1910 with more products in the value part of the handheld market and does not plan on ceding any market share to Dell--or anyone else.

"We're going to continue to look at 'Can we go lower?'" Box said.

Burden said Dell's low prices could leave the rest of the industry scrambling to find ways to cut price tags.

"A $199 price point, I think, is going to be very disruptive," Burden said.

As for the new high-end wireless iPaq, the Pocket PC h5450 includes Bluetooth and Wi-Fi wireless connectivity, a fingerprint reader for owner authentication and a powerful infrared port that allows the device to work as a universal remote control. (The h5450 received FCC approval last month.) However, the model also features a high-end price: $699.

While it is important for HP to keep adding features, models with the latest and greatest features are going to represent a smaller part of the market, Burden said.

"This is a niche device," Burden said. "They're not going to sell a lot of them."

The h5450 will be available worldwide next week, while the h1910 will initially be available only in the United States.