April 28, 2004 9:59 AM PDT

PalmOne adds to entry-level Zire line

Handheld maker PalmOne on Wednesday announced two additions to its Zire line of devices, which target the entry-level consumer--an increasingly important segment of the market.

As previously reported, PalmOne began selling its $299 Zire 72 and $149 Zire 31 Wednesday. Both devices will use PalmSource's Garnet operating system, and will come with Secure Digital expansion slots and digital audio players.

PalmOne's Zire 72 The Zire 72 is more advanced than the Zire 31 and has Intel's 312MHz PXA270 chip, 32MB of memory, a built-in 1.2 megapixel digital camera, color display with a resolution of 320 pixels by 320 pixels, and Bluetooth networking technology. The Zire 31 uses a 200MHz Intel handheld chip and has 16MB of memory and a color display with a 160-by-160-pixel resolution.

The devices are part of the Milpitas, Calif., company's annual spring consumer product launch, and this one marks the first since the company split from it operating-system arm. The handheld maker also traditionally has a fall product launch for buyers who will use devices for business purposes.

The consumer segment has been the meat of the market for handheld leader PalmOne and others, which has driven prices down because consumers tend to look for cheaper devices. PalmOne is building out it product line to match the increasing influence of consumers, according to Andrea Johnson PalmOne product group manager. The company will continue to sell the $99 Zire 21.

"We now have products for people who want just the basics?for those who want a brighter screen and a media-center device," Johnson said.

PalmOne's Zire 31 After two consecutive quarters of growth, worldwide handheld shipments declined 11.7 percent in the first quarter from the year before, to 2.2 million units. The first quarter is traditionally a slow selling period for the market, but this year it was a victim of strong fourth-quarter sales as consumers flocked to stores for holiday deals. Shipments dropped 33.1 percent from the fourth quarter to the first, according to the report.

Since the launch of the original $99 Zire in late 2002, sales of the devices to consumers have provided a welcome boost to the struggling handheld maker. PalmOne split its product and brand strategy in late 2002, targeting the consumer and business markets with different products to better address their needs.

The company recently said it has sold more than 3 million Zires in less than 18 months.

 

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