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Handspring’s Visor Moves To Retail

March 27, 2000

SAN JOSE, Calif. (AP) _ The hot market for handheld devices has rested in one company’s Palm for years. Upstart challenger Handspring Inc. hopes people will see another world of possibilities when the Visor appears Monday in stores nationwide.

Handspring’s electronic personal organizer, with planned add-ons called ``Springboards″ in the works to turn it into everything from a phone to a digital camera to a music player, has been selling briskly on the Internet since last fall.

Monday’s move into wider circulation is the first serious test of its staying power.

``We’ve got some explaining to do ... about how we’re really different,″ said Greg Woock, Mountain View-based Handspring’s vice president of North American sales. ``The biggest differentiator, the thing that makes us not like any other device, is our Springboard expansion slot. It pops in and out of the back of the Visor and allows you to extend the software and hardware capabilities.″

More than a dozen such products are in development for the Visor, although only three _ a golf game, extended memory and backup module _ are currently available as the Visor goes on sale in approximately 1,500 Staples, Best Buy and CompUSA stores. Modules that can turn the device into a cellular phone and pager are expected by the important Christmas shopping period, Handspring executives say.

First up is the $149 base Visor model with 2 megabytes of memory that can store 6,000 addresses, 3,000 appointments and 200 e-mail messages. A model with 8 megabytes of memory, doubling the storage capacity, sells for $249.

Palm also faces a fresh assault from Microsoft Corp., whose Windows CE failed to catch on as an alternative to the Palm operating system. A slimmed-down Windows CE version called PocketPC will be in new devices shipping in mid-April.

``The new Microsoft platform is considered their get-it-right version on the third try,″ said analyst Rob Enderle at research firm Giga Information Group. ``The Handspring-Microsoft combination could be very damaging for Palm unless they begin executing extremely well.″

Palm, which went public in early March, hasn’t been standing still. Prices for its entire line have fallen sharply in the past six months, with the cheapest models now available for about $150. It also rolled out its first color screen in the Palm IIIc _ a feature the Visor currently does not offer, although one is planned.

The3Com Corp. subsidiary also is expanding its management team to include a chief technology officer responsible for new developments. And on April 15, it begins selling the Palm IIIc and Palm Vx handhelds in Japan.

Palm has been the clear leader in the handheld market, holding a 75 percent share, according to PC Data, a Reston, Va.-based market research firm. The company has sold more than 5.5 million devices since 1996.

But the Visors pose a serious challenge. They use the Palm operating system, extend some of the Palm features while adding others, and have a speedier computer link for backing up data.

``The Visor is considered to be a better implementation than Palm of the same technology,″ said Enderle. ``And it’s just the first of a series of products _ a line that uses a different operating system and adds color _ that Handspring is expected to bring out.″

Handspring’s founders, Donna Dubinsky and Jeff Hawkins, also were the original developers of the first Palm product.

``Another firm formed around your own key architects could be very daunting for any company,″ Enderle said. ``If (Handspring) puts its initial manufacturing problems behind them, the Visor will be a very powerful challenger.″

The Visors went on sale in the fall but a crush of orders and an industrywide shortage of memory chips made for a bumpy debut.

Jonathan Magasanik, vice president and a general merchandise manager for Staples, said the competition from Handspring’s Visor should gain credibility for handheld devices in general, advancing the overall market.

``It moves beyond the early adopters of new devices,″ Magasanik said. ``It’s going to provide an element of confirmation to the masses.″

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