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HandEra waves goodbye to Palm

The Midwestern handheld maker says it will stop making devices using the Palm OS because of cost increases associated with licensing the operating system.

It's the end of HandEra's ties with Palm.

Des Moines, Iowa-based HandEra announced Wednesday that after May 31, it will cease shipments of devices based on the Palm operating system. The company cited increases in licensing fees of the OS as the reason for its actions.

Privately held HandEra, formerly TRG Products, was founded in 1992 and has two handheld devices based on the Palm OS, the TRGpro and the HandEra 330.

"We regret the impact that this announcement will have on our customers," Mark Kubovich, president of HandEra, said in a statement. "HandEra will offer new products to serve the OEM (original equipment manufacturer) mobile computing market in the near future."

HandEra and PalmSource, the developer of the Palm OS, did not immediately return calls seeking comment. Other Palm OS licensees with devices in the market include Handspring, Kyocera, Palm and Sony Electronics.

Though small, HandEra was among the first manufacturers to come out with a device that had a high-resolution screen and dual memory slots. But changing conditions in the handheld industry has made it tougher for smaller companies to compete, according to Alex Slawsby, an analyst at research firm IDC.

"HandEra quickly lost their competitive advantage as higher research budgets of larger rivals beat them in innovation," Slawsby said.

Analysts say HandEra's exit from the Palm-OS based handheld market isn't that big of a surprise, and others may be on their way out as well.

"Falling handheld component prices and thinner overall device margins is making it tougher for small businesses to compete," Slawsby said.

HandEra began as a technology consulting company, but in 1997, 3Com asked HandEra--then TRG--to do some consulting work related to one of the Palm's custom chips. TRG engineers were smitten with the handheld device, but thought it could benefit from greater memory.

The company came out with a memory expansion card for the Palm later that year and eventually introduced the TRGpro. In 2000, the company abandoned its consulting efforts to focus solely on the handheld market.