Palm: Zire tops 1 million units sold

Palm's Zire device seems to be a hit, as the struggling handheld maker looks to regain its footing.

The Milpitas, Calif.-based company said Monday that sales of its entry-level Zire product have exceeded the 1 million unit mark and that it's the fastest-growing handheld in the company's history.

The Zire is a $99 low-end device, which comes with 2MB of memory--typical for entry-level Palm handhelds--a black-and-white screen and a rechargeable battery. It runs version 4.1 of the Palm operating system. The Zire was introduced late last year, shortly after Palm split its product line into two brands: the Zire for entry-level consumers, and the Tungsten for gadget fans and mobile professionals.

Palm has indicated that sales for the entry-level Zire have been brisk and that the device has quickly moved up the charts for the device market. But what may be more noteworthy is the timing and what the device means for a company that is looking to reverse its fortunes.

Palm has been struggling of late, but it's counting on the Zire line to tap the potentially huge consumer market while using the Tungsten line and its midrange Zire 71 to appease its traditionally loyal enthusiast audience.

"This is impressive, but even more so is that they did it more in the first quarter, (rather) than during the holidays last year," said Kevin Burden, an analyst with research firm IDC.

The underlying meaning could be that the device is truly an impulse buy, but Burden said the fast and high sales rate of the Zire shouldn't be that surprising.

"The low end is squarely in the hands of Palm and (the entry-level Zire is) at a low price point in a market that is unsaturated," said Burden, who projected that sales of the Zire should reach 2 million before the end of the year. "No one else is competing with Palm in the low end."