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Palm unveils new handheld line, new features

The company releases new handhelds for the higher and lower ends of its market as part of its effort to stay ahead of encroaching rivals.

    Palm today released new handhelds for the higher and lower ends of its market as part of its effort to stay ahead of encroaching rivals.

    The Santa Clara, Calif.-based handheld computer manufacturer released the m100, a $149 organizer that can be paired with different designer faceplates. In addition, the company came out with a souped-up version of its Palm VII, which hooks up to the Internet via a wireless connection, and two designer models of its Palm Vx.

    As reported earlier, the m100, which replaces the Palm IIIe, is an attempt to compete more directly against Handspring's Visor, a low-priced device that has been steadily gaining market share against Palm in the past few months. The Visor, based on the Palm operating system, also comes in colors, although it does not offer changeable cases.

    Like the Visor, the m100 will come in many colors. The device will come with a black faceplate, but for $19.95, consumers can buy snap-on designer faceplates. While the Visor comes in Day-Glo colors, Palm's faceplates come in colors that sound like they got lost on the way to an auto show: Silver Mist, Blue Mist, Green Mist, Pacific Blue and the somewhat contradictory Ruby Pearl.

    The m100 will also be complemented by a series of add-on devices. Companies such as Eastman Kodak and Northstar Systems will manufacture cameras and MP3 players that can be attached to the m100. One of Handspring's major marketing efforts has touted add-ons. The m100 also comes with a new version of the Note Pad program.

    At the other end of the price spectrum, The Palm VII will come with 8MB of memory, more than previous versions, and a wider variety of content. It will sell for $449 and is expected to offer more content partners than did the previous versions. The m100 is aimed primarily at the education market, which Palm has identified as a potential growth area.

    The company also formally unveiled the Palm Vx Limited Edition, a special version of the Palm Vx available only through the Palm.com online store. The updated Palm V will come in two colors--Millennium Blue and Champagne--and will feature 8MB of memory. These deluxe models cost $399 and will be available in limited numbers.

    In addition, Palm unveiled the Palm Ethernet Cradle, which lets customers directly connect to corporate networks. Currently, consumers connect Palms to networks through their PCs. The new cradle, which costs $249, essentially eliminates the synchronization step. As a result, customers will be able to link to networks even if they aren't near their base computers. An Ethernet Cradle hooked into the same network will do the trick.

    To celebrate today's product launches, Palm will throw a party for employees to coincide with an announcement that this year's revenues will top $1 billion. The "Billion-dollar bash/Fall product launch" party will take place at Palm headquarters in Santa Clara.

    Today's new models PalmVxLimited are the first products from the company since the release of its Palm IIIc device in February, which debuted to underwhelming reviews and lackluster sales.

    In the months following, Palm sales have suffered because of supply issues. Short supplies of in-demand components such as displays and flash memory have made it difficult for Palm to keep popular products like the Palm V and Palm IIIxe on store shelves. Many retailers have been back-ordered on those products for months.

    Palm is not the only company suffering from product shortages. Compaq Computer's iPaq Pocket PC has been hard to find since its introduction in June, mostly because Compaq did not anticipate the demand for the product.

    Palm licensee Handspring has capitalized on the shortages, gaining market share as one of the only devices to be fully stocked among retailers. PC Data reports that Handspring had the best-selling product in June and accounted for 25 percent of all handhelds sold at retail.

    Although the colorful m100 appears targeted at blunting Handspring's momentum, Handspring's chief promises that the company has more tricks up its sleeve.

    "We never expected that color cases was a sustainable, long-term competitive edge," company founder Donna Dubinsky said earlier this month, alluding to upcoming products featuring wireless Internet access.

    There is a certain level of irony in Handspring's present good fortune. Handspring initially sold its Visor only through its own Web site, a decision that resulted in product delays and customer-service complaints while the young company grappled with overwhelming demand and e-commerce software glitches.

    Palm last week announced the Claudia Schiffer version of its Palm Vx device. The supermodel will sell her own version of the Palm device through her Web site, the company said.

    News.com's Michael Kanellos contributed to this report.