March 5, 1998 8:40 AM PST

Price cuts precede new PalmPilot

3Com (COMS) cut prices on its popular PalmPilot line of personal information devices by up to 20 percent today, a move that precedes next week's introduction of a brand-new PalmPilot and comes at the same time as lawsuits against would-be competitors in the handheld market.

The company is expected to round out the PalmPilot product line, which currently includes the Personal and Professional versions, with a new device sporting a more organic look and the tentative moniker of "Palm III."

But first, 3Com cut the price of its PalmPilot Personal Edition from $247 to under $200, as previously reported. At the high end, the Professional Edition received a price cut of $69 as well to $300, a larger than expected reduction of 18 percent.

The price cuts precede Monday's anticipated announcement of the Palm III, which will sport a slightly curvier and slimmer case and an updated operating system likely to offer improved handwriting recognition, as previously reported. The price is expected to be set at $399, according to industry sources.

In Europe, Palm Computing filed lawsuits in Germany and Italy against Microsoft for trademark infringement, according to the New York Times. New "Palm PC" devices are based on a version of the software giant's Windows CE operating system for handheld computers and would offer similar functions to the PalmPilot.

Company executives are objecting to the use of the Palm PC name, which they say can be confused with their product. The Palm PCs are anticipated to be ready for release in March or April, but lawsuits could delay their appearance in some areas.

Thus far, PalmPilots have dominated the handheld computer market. Over 1.6 million PalmPilots have been sold, and the user base will be around 2.2 million by the end of 1998, according to analysts. Segmenting the market into sub-$200, $300, and $400 price points could help increase sales volume for Palm Computing by attracting people who couldn't previously afford the newest version of the device.

 

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