June 14, 2000 5:15 PM PDT

Palm shortage feeds auction prices

With supplies of Palm handheld computers running tight, impatient consumers are turning to auction sites such as eBay and often paying well above retail price for new and slightly used units.

Bids for the low-end Palm IIIe, which has a $149 retail price, have stretched to more than $200 and beyond in recent weeks. The pricier Palm V has also been garnering bids above its $329 suggested price.

As previously reported, shortages of LCD screens and other components are limiting Palm's ability to increase production of the handhelds. Palm executives say demand is intensifying with graduation season and Father's Day.

"We are making and shipping more than ever before, but we're still not able to keep up with demand," said Palm spokeswoman Marlene Somsak. "We do expect the component shortage to lighten up in the quarter we just began (June 1)."

Somsak said the company has heard reports of people asking stores when the next shipment of Palms is arriving and then lining up to purchase them. Palms are also on back-order at many online stores, including Amazon.com, Buy.com and Egghead.

Kevin Homer, a regional sales director for JobDirect.com, bid $230 on eBay for a Palm IIIe and forked over $12 more for shipping.

"Convenience of ordering was a big factor, although I ended up paying more than I wanted," Homer said via email. "It's kind of funny with a service like eBay--you can get swept away with the excitement of the bidding war when the clock is winding down."

Douglas Moe, a production coordinator at a New York-based Internet company, said he paid above list price to get one of the "special edition" Palm IIIe units with a clear case.

"I paid about $188, where it would have been $150 if I could have found it in a store (or online) anywhere," Moe said in a message.

eBay often serves as a marketplace for goods in short supply.

Something of a gray market developed for the original Netpliance I-opener on the auction site. After Netpliance altered the $99 device to prevent user modifications that could turn it into a full-fledged Linux-based PC, eBay had listings for original "hackable" I-openers, with bidding up to $255.


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