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Palm takes aim at the high end

Aiming to kick-start a sluggish market for handhelds, the company announces two new devices for mobile professionals and businesses.

    Aiming to kick-start a sluggish market for handhelds, Palm has unveiled two new devices for mobile professionals and businesses.

    As previously reported, the new handhelds in the Tungsten line are designed for the high end of the market. They include a color wireless device, as well as the first Palm device to run the new version 5.0 of the Palm operating system.

    Palm, which has been criticized for not innovating fast enough, has all-new designs for both devices. The Tungsten T, which will sell for $499, comes with a high-resolution color screen and 16MB of memory.

    The device, which slides open to reveal the Graffiti area, is the first Palm device to run the new version 5.0 of the Palm OS. As such, it is also the first to use a new breed of ARM-based processors, in this case Texas Instruments' 144MHz OMAP (Open Multimedia Applications Protocol) processor. The Tungsten T has Bluetooth wireless technology to connect to other devices or get wireless data access by connecting to a cell phone. It also features a higher resolution 320-by-320-pixel screen.

    Meanwhile, the wireless Tungsten W is the first Palm model with a built-in keyboard and uses the next-generation GPRS (General Packet Radio Service) network for always-on high-speed data access. The device is capable of making phone calls with a plug-in earpiece, but Palm is downplaying its cell phone abilities.

    "We don't expect people to replace their mobile phone with this device," said David Christopher, senior director of product management for Palm.

    Although it runs an older version of the Palm OS, the Tungsten W also has a 320-by-320-pixel screen. The device will be priced at $549 without a service contract, although Palm says wireless carriers may subsidize the devices to offer them at a lower price to those who sign up for a service contract.

    Initial shipments will begin this month in Europe, with the device hitting U.S. shores in the first quarter of 2003. Palm plans to announce at least one carrier for the device Monday.

    Meanwhile rival Handspring has trimmed the price of its black-and-white Treo 180 to $249 with a service contract, a $100 drop. The same model saw its price drop from $399 to $349 in September.

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    Palm forges new Tungsten handhelds
    David Christopher, product manager, Palm
    Both new Palm handhelds use a new five-way controller pad, which allows owners to do more things without having to reach for the stylus, Christopher said.

    High note or high drain?
    Because of its faster processor and use of the new operating system, the Tungsten T can do things that other Palm handhelds have not been able to do, such as play music. MP3 playing software will not come in the box, though. Because storing music typically requires add-on memory cards, Palm does not want to tout that feature too highly.

    Also, music playing is a drain on the battery of the Tungsten T, which Christopher says can otherwise get about a week's worth of use, assuming about 30 minutes of use a day with some use of Bluetooth. That's not as good as the life on the m515's battery, which could last two to three times longer.

    Although Palm is not including music playing software with the device, Christopher said he expects that RealNetworks will make a free RealOne player for the Palm shortly. IMAGE TEXT HERE

    IDC analyst Alex Slawsby said the Tungsten T is something to silence Palm's critics, but that won't necessarily make the new product a huge seller.

    "There's two sides of the coin," Slawsby said. "Everyone has been on Palm to innovate to push the design, to change the way people think about Palm. I think the T definitely does that."

    However, at $500, Slawsby said the device has tough competition from Sony as well as from handhelds running Microsoft's Pocket PC operating system. Pocket PCs have been coming down in price, with ViewSonic recently announcing a $299 device. Dell Computer is said to be readying a low-price model as well.

    "That space is very crowded," Slawsby said. "That's going to make it...we think, hard to build momentum beyond Palm loyalists."

    As for the Tungsten W, Slawsby said Palm's decision to downplay its cell phone abilities means that Palm will have to take on the BlackBerry head-on.

    "No one has figured out how to sell more than a couple hundred thousand devices," Slawsby said of the combination cell phone-handheld device market.

    To tout the two new products, as well as the recently introduced Zire, Palm is kicking off a new advertising campaign. The company plans to spend about $10 million over the next six months on the ads, which will include mostly print ads along with some online ads, said Page Murray, Palm's vice president of marketing.

    Aiming to reach a broader market for the low-end Zire, Palm is also expanding its advertising to new magazines such as People, Redbook and Ladies' Home Journal.

    "These are not the sort of tech-savvy business professional magazines that we have advertised in the past," Murray said.