HP takes iPaq down market

The slim h1935 is similar to the $299 (£190) h1945 model introduced in June, although without that device's built-in Bluetooth wireless capability. The new model, which will sell for $199 after a $50 rebate, has only half as much read-only memory (ROM) and comes with just a 90-day warranty, compared with the one-year warranty that comes with other iPaq models.

HP's introduction of the new model, which is similar to one already selling in Europe and Asia, comes after the company reported disappointing earnings, including a return to red ink for the business unit that encompasses PCs and handheld computers. Handhelds have been one of the company's strong suits, thanks to the iPaq brand Compaq established. However, rivals such as Dell have been making inroads, due in part to lower prices.

HP claims that the decision to offer a cheaper iPaq was in response to demand from customers, not by competition from Dell. "It's not driven by any one competitor and where their product is positioned," said John Dayan, director of HP's handheld business for the Americas region.

Although the $199 price is the lowest introductory price for a colour iPaq, HP recently has been selling its older h1910 model for $199 after rebate. HP brought out the h1910 model around the same time last year as Dell entered the market with its Axim models.

The new model, which goes on sale on Tuesday, is roughly similar to the h1910 model as well, although it has a few advantages. The new handheld can use its postage stamp-sized Secure Digital expansion slot for devices such as a recently introduced digital camera, while a similar slot on the h1910 could only be used to add memory. Also, it has the new Windows Mobile 2003 operating system, as opposed to Pocket PC 2002, and it uses Samsung's 203MHz processor, rather than the 206MHz Intel chip found in the h1910.

That continues a trend by HP to go with Samsung's chip in its low-priced models. In addition to its lower cost, HP executives have said the Samsung processor outperforms Intel's XScale on a megahertz-to-megahertz basis. HP still uses XScale chips in its higher-end models.

Dayan said the h1945 with the 266MHz Samsung chip offers up to 87 percent higher performance than the h1910. "It (has) higher performance even with the 203MHz (Samsung) chip," he said, although some of the performance gain also is attributable to the operating system.