June 17, 2003 9:00 PM PDT

Handspring's new Treo caters to carriers

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Take a sneak peek at the new Treo
Greg Shirai, director of product marketing, Handspring
Handspring is hoping its newest cell phone and organizer device will be easier for wireless carriers to customize while still meeting the demands of consumers.

The Mountain View, Calif.-based company on Wednesday plans to introduce the Treo 600. The gadget, which will be able to run on CDMA (Code Division Multiple Access) and GSM (Global System for Mobile Communications) networks, will be available in the fall through wireless carriers Sprint and Orange. The two carriers will determine the price of the device, but it is expected to cost between $400 and $500.

For over a year, Handspring has been developing an assembly line approach to upgrading its Treo devices in an effort to meet the specific needs of carriers. The Treo 600 is the first device to use this approach. The new gadget will essentially be a foundation on which carriers and Handspring can add new software and features. Carriers will be able to sell it in different colors or with different software titles.

"It's been a real learning experience switching from the channel to carrier model," said Greg Shirai, director of handheld products at Handspring. "We're all looking for a secret sauce...Operationally we're a lot more savvy now, and we're finally at a point where we're able to customize a device more easily."

Teams at Handspring are developing software profiles of carriers to allow the company to upgrade the Treo 600 according to carriers' specifications. This could potentially allow Handspring to close carrier deals faster and get to market sooner, according to Kevin Burden, an analyst with research firm IDC.

"Phones can be held up in carrier tests for up to nine months, or indefinitely, so anything that cuts that time down is to the maker's benefit," Burden said.

About a year and a half ago, Handspring CEO Donna Dubinsky said the device maker was changing its business to target wireless carriers. The change means carriers often call the shots during product development instead of consumers making the calls.

To make up for the loss in control, device makers are rewarded with high-volume sales; carriers generally buy hundreds of thousands of units whereas consumers generally buy a single unit. The downside is that each carrier has different requirements to fit the needs of their networks, making it a time- and resource-consuming process.

The market for devices that send and receive data and voice is small compared with the cell phone market, which could reach as high as 500 million units this year. "This is an emerging category, which still hasn't taken off, but we're making headway," Shirai said.

One of the reasons why Handspring announced the device so far ahead of its release was to build support from software developers while it was being tested and approved by its carrier customers.

A phone feel
Despite the focus on carriers, Handspring says it's still dedicated to improving the device based on customer feedback. Shirai said a common consumer request was to make the device more like a phone than an organizer, so the company has moved away from the flip-phone design used in earlier versions of Treo devices and instead went with a case that is shaped like a bar of soap.

Treo 600 "The PDA (personal digital assistant) form factor is really a U.S. phenomenon," Burden said. "By breaking away from that (Handspring) can address markets and countries outside the U.S. which tend to be more phone-centric."

The Treo 600 is smaller than earlier versions of Treo devices and comes with a built-in VGA camera and a bright color display with a resolution of 160 pixels by 160 pixels. Handspring put most of its design efforts into the keyboard, making the keys and lettering larger but moving them closer so they wouldn't take up more space on the device.

The Treo 600 also has a longer talk time--up to six hours--than previous versions, which lasted up to four-and-a-half hours. The device will use version 5.2 of the Palm operating system and will come with a keyboard and a Secure Digital expansion slot.

The gadget has already made a cameo appearance in a photo marking Palm's acquisition of Handspring, which is expected to close in July. Handspring Chairman Jeff Hawkins also has alluded to new features on the device in an interview with CNET News.com.

According to Shirai, the company could eventually come out with an entire family of models based on the Treo 600, for instance, low-end models with fewer features or higher-end versions with improved multimedia capabilities. He expects carriers to continue selling older devices in the Treo family, such as the Treo 270 and 300, but at lower prices.

 

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