Handspring brings color to new organizer

Handspring unveiled on Monday two new handheld computers--including its first device with a color display--as part of its continuing battle against market leader Palm.

Meta Group says that although Handspring's late arrival with a color screen for its handheld computer is not a significant problem, the company does face other long-term issues. see commentary

The Mountain View, Calif.-based company said the $499 Visor Prism, can display more than 65,000 colors. The company said the other device, the Visor Platinum, runs 50 percent faster than the Visor Deluxe, its previous top-of-the-line product. The Visor Platinum costs $299.

Both products will be available in November, the company said.

Handspring, started by the founders of Palm, is battling Palm and other handheld device makers for market share. Traditional PC makers such as Compaq Computer and Hewlett-Packard have created their own line of handhelds using Microsoft's Windows CE operating system. And consumer electronics giant Sony has launched its own handheld, called the Clie.

David Thor, an analyst with ResearchPortal.com, said Handspring "had to make this move (to a color screen) to be competitive. It is now a full-featured product. Until now, they didn't have this feature to fill the hole in their product line."

Despite the fact that most of its competitors already sell products with color screens, Merrill Lynch analyst William Crawford doesn't see Handspring as behind the curve.

"They are a relatively new company, I wouldn't have expected anything earlier," Crawford said. "Now, they provide what their competitors do."

Handspring, like other handheld makers, is also eyeing additional consumer electronics areas by making available options that can transform personal digital assistants (PDAs) into cell phones and other devices.

Handspring last month unveiled VisorPhone, an add-on cartridge that turns its Visor handheld computer into a cell phone. Microsoft and Palm are also hard at work on such hybrid products, which are expected to one day be a popular way to access the Net, make calls, buy products online, and send and receive email.

To make its handhelds available to a broader audience, Handspring inked a deal with PC giant Gateway earlier this month to sell Visor handhelds bundled with software, carrying cases and add-ons such as digital cameras. Gateway will cut the price for those who buy a Gateway PC at the same time.

Handspring is also establishing its presence in Asia. Earlier this month the company began selling the Visor PDA in Singapore, Taiwan and Hong Kong, Handspring said.

Handspring's move to broaden its distribution worldwide comes as the company's retail sales have taken a slight dip. In August, for the first time since its arrival in retail stores earlier this year, the Visor lost ground to market leader Palm.

The drop in market share is likely related to Palm's release in August of the M100, an entry-level PDA aimed squarely at the Visor, with a similar colorful case and $149 price tag.