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Handspring announces European expansion

Handheld computer maker to open European headquarters, the latest step in a global expansion that comes amid lingering product shortages.

Handheld computer maker Handspring said today it was opening European headquarters, the latest step in a global expansion that comes amid lingering product shortages.

By establishing a European headquarters and expanding its efforts in Asian markets, Handspring gains access to two regions where wireless communications are both fairly advanced at a time when the convergence of handheld organizers and communications seems inevitable.

Handspring launched its first handheld family, the Visor, last fall. The company, which was formed by Palm co-founders Donna Dubinsky and Jeff Hawkins, licensed Palm's operating system and created a device which looks and works like a Palm unit, with the addition of an expansion slot, dubbed the Springboard, for adding keyboards and other peripherals.

Despite the pedigree of the company's executives, the excitement over the possibilities for Springboard cartridges and general enthusiasm among consumers for digital gadgets, Handspring has gotten off to a rocky start. The company was not able to keep up with initial orders and has not yet made its products available at retail.

For its part, Handspring says its logistical and distribution issues are behind it and that it is time to move forward with plans for expansion.

"We've built out the company's infrastructure to keep up with demand and have gotten a lot of the logistics and customer support stuff under control," said CEO Dubinsky, emphasizing the importance of Europe and Asia to Handspring's long-term plans.

"It's a global market, and we want to be a leader on a global basis," she said. "I've always had the philosophy that you have to have a strong international business, and there's no doubt that it's a huge opportunity for us."

Meanwhile, licensing company and rival Palm has stolen Handspring's thunder in some respects, with the release of its first color device and its much-hyped IPO last month.

With its domestic issues still not fully resolved, some analysts question whether it's too early for Handspring to aggressively court foreign markets.

"The European move is an offensive move," said David Thor, research director of ResearchPortal.com. "What they're doing in the States right now is defensive--following the moves of others, not leading."

Dubinsky disagreed with that assessment, pointing to the impact the Visor has had on the handheld industry in terms of pricing and the expansion capabilities the Springboard affords. Also, Visor's absence from the retail channel does not pose an immediate problem because the company's online sales are finally up to speed, she said.

Handspring announced its new Geneva, Switzerland office will house Handspring International SARL, with customer support operations in the Netherlands and sales and marketing offices in the United Kingdom and Germany.

Roger Kermisch will serve as vice president and general manager of European operations, with Roy Bedlow, former director of Iomega Europe, taking over as European marketing director. Simon Faulkner, formerly of Logitech UK, will be the European sales director.

Europe is appealing to companies with wireless aspirations because the entire continent uses a single network, GSM, rather than the mishmash of carriers and services that the U.S. offers. Thus, it is easier for companies to experiment with wireless products abroad than it is domestically, analysts say.

"There are incentives to launch new products in Europe and Japan for a number of reasons," said Billy Pidgeon, an analyst with Jupiter Communications. "It gives you the ability to have a fabulous test market, especially for connected stuff."

Handspring has said the company's future lies in wireless communications, and wireless Springboard modules have been announced.

"The Visor is specifically designed for wireless communications, and there are several things under development," Dubinsky said, declining to specify unannounced products. "This was our first product, not our last," she said.

In the meantime, however, consumers in the United States are still complaining of shipping delays and customer service problems. The company's plans to introduce the Visor and Springboard modules in retail stores have yet to materialize, so the devices are only offered directly through the manufacturers.

"I don't think they've lived up to the hype thus far," Thor said.