Delays hurting Handspring's Visor sales

Handspring will most likely not be able to deliver for many holiday shoppers this year, the handheld computing start-up concedes, as it is still grappling with overwhelming demand the Visor.

4 min read
You may want to take Handspring's new Visor device off your holiday shopping list.

Handspring will most likely not be able to deliver for many holiday shoppers this year, the handheld computing start-up concedes, as it is still grappling with overwhelming demand for its new device.

Visor, which is currently only available through Handspring's Web site, is back-ordered by up to two months in some cases, and even customers who order it today should not bet on receiving the device in time for the holidays.

The impact of missing out on the highest-volume sales period of the year is unclear, analysts say. Most companies who sell to consumers count December as their biggest month. Handspring, however, argues that it never intended to make a huge promotional push this holiday season and is thus on track with its original marketing vision.

"We're not positioning the Visor as a holiday gift, and we never did," said Allen Bush, a spokesman for Handspring. "We knew when we got up that we weren't going to be a big Christmas product."

Although the new company will not be able to aggressively promote its products with holiday shoppers, some analysts believe that the delays will not make a huge impact in the start-up's ability to establish itself with customers.

"It's not a critical situation," said Tim Scannell, an analyst with Mobile Insights. "If they're saying the holiday season is not part of their strategic plan, I buy that--with a grain of salt."

Devices such as the Visor, along with products from Palm Computing and handhelds based on Microsoft's Windows CE operating system, have gained attention as the computer industry looks to simpler, scaled-down gadgets as the future of computing and Internet access.

No longer the sole province of early adopters and tech-enthusiasts, handheld devices are now being purchased by large companies as communications and productivity tools and are regarded as powerful computing platforms in their own right.

Handspring unveiled the Visor in August, about a year after the company was formed by Palm's co-founders, Donna Dubinsky and Jeff Hawkins. Most companies that unveil products in August are doing so with the intent of positioning themselves for the holiday buying season, Bush conceded, but argued that was not the case with Handspring.

"A lot of people will launch a product in the August time frame to get into store shelves," he said. "We wanted to get our products into the market so we could start attracting developers," he said, referring to companies that are marketing modules for Handspring's Springboard slot.

Visor resembles a Palm device in most respects, with the addition of the expansion slot which allows users to upgrade their devices with a range of third-party cartridges. Planned Springboard modules include modems, communication devices like cell phones, MP3 music players, and digital cameras.

Currently, Handspring is shipping 8MB flash memory and backup cartridges, Bush said. Other modules are not yet available.

Handspring is sticking to its original plan of selling Visor in retail stores by the first half of 2000, which should alleviate some of the availability issues, as well as some of the problems Handspring has experienced with its e-commerce efforts. "We're in the process of selecting retail partners," Bush said.

In part because of Dubinsky and Hawkins's track records in the handheld market--and also because the $149 price tag for the Visor is below the least-expensive Palm device--many handheld computing enthusiasts have been feverishly awaiting the Visor.

Many of these early adopters expressed frustration with Handspring's online store, which was taken down soon after it opened its virtual doors, with customer service representatives reportedly taking orders with pen and paper, over the phone. Many early customers have since complained about botched orders, wrong charges on credit cards, and difficulty tracking their orders.

Handspring's online store has been back in business for a few weeks, although it has been slowed by heavy traffic. Key positions at the young company remain unfilled, according to Handspring's Web site, including "manufacturing & logistics business systems manager," "service logistics and repair manager," "director of customer service," and "manufacturing program manager."

But Bush says the brunt of the problems are in the past. "We have the necessary infrastructure in place; we just need to get caught up with the backlog," he said. "We're not advising people one way or the other about Christmas orders, but we're trying our best to manage expectations."

Handspring's holiday woes won't hurt the company in commercial markets, Scannell noted, although commercial sales tend to rise in December as IT (information technology) managers blow out their budget. "If you look at what the IT market is looking for, this is a product that can be easily vertically integrated," because of the Springboard slot, he said.