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New PalmPilot, price cuts due

3Com will cut prices on its PalmPilot handheld computer up to 20 percent as a prelude to unveiling a brand-new model next week.

3Com will cut prices tomorrow on its PalmPilot line of personal information devices up to 20 percent as a prelude to the introduction of a brand-new PalmPilot next week.

The company is expected to round out the PalmPilot product line, which currently includes the Personal and Professional versions, with a new device sporting a more organic look and the tentative moniker of "Palm III."

But first, 3Com will cut the price of its PalmPilot Personal Edition from $247 to under $200, sources said. At the high end, the Professional Edition is expected to receive a price cut of $50 as well, a reduction of 13 percent. This model currently carries an estimated street price of $369; some resellers are already offering the Pro Edition for under $300 in anticipation of the official announcement.

The price cuts come precede Monday's anticipated announcement of the Palm III, which will sport a slightly curvier and slimmer case and an updated operating system that is likely to offer improved handwriting recognition, as previously reported. The price is expected to be set at $399, according to industry sources.

Thus far, PalmPilots have dominated the handheld computer market. Over 1.6 million PalmPilots have been sold, and the user base will be around 2.2 million by the end of 1998, according to analysts. Segmenting the market into sub-$200, $300, and $400 price points could help increase sales volume for Palm Computing by attracting people who couldn't previously afford the newest version of the device.

3Com may also be hoping that the release of Palm III draws some attention away from the release of the new Palm PC devices from Microsoft, which are also expected to hit the market sometime in March. The PalmPCs are based on a version of the software giant's Windows CE operating system for handheld computers and would offer similar functions to 3Com's products.

Palm Computing executives could not be reached for comment.