Palm will begin pitching three new handhelds on Wednesday as it looks to expand its audience while pleasing its loyal enthusiast crowd. But analysts said bleak back-to-school sales numbers may indicate a not-so-happy holiday season.
As previously reported, the hardware division of Palm will introduce two Tungsten devices, the T3 and E, aimed at business buyers, and the Zire 21, which will replace the company's consumer hit from last year, the £89 original Zire. Each of the devices will use ARM-based processors and version 5.2.1 of the Palm operating system, allowing them to perform advanced capabilities beyond those of their predecessors.
The £329 Tungsten T3 comes with an Intel 400MHz XScale chip for handhelds, 64MB of memory, Bluetooth connectivity, a colour screen with a resolution of 320 pixels by 480 pixels and portrait and landscape views on the display.
The £149 Tungsten E and $99 Zire 21 use Texas Instruments 126MHz OMAP311 ARM processors, but the E comes with 32MB of memory and a colour screen with a resolution of 320 pixels by 320 pixels, and the Zire 21 comes with 8MB of memory and a monochrome display, but no backlight.
The Tungsten T3 and the E come with an expansion slot that is compatible with Secure Digital and MultiMediaCard cards. The Tungsten E has a thin, sleek case and includes a built-in digital audio player.
The Tungsten E and Zire 21 are essentially significant updates to two of the company's most popular products, the Palm V and the original Zire, and Palm is looking to draw new customers as well as get previous customers to upgrade.
"The E is a logical upgrade for Palm V users," said Anthony Armenta, senior product line manager for the Palm Solutions Group.
Palm gets a significant amount of business from previous handheld customers who upgrade, but those numbers have been dwindling as loyal buyers have accused the company of not improving its handhelds fast enough, according to analysts. Recently, however, that cry has been muffled as Palm has released devices, such as the Zire 71 and the Zire, that have proved to be very popular with consumers.
"Upgrades have played a very significant role in (Palm's) success," said IDC analyst Kevin Burden. "Expanding beyond this audience will be crucial, and they've done that so far with the Zire line, but they have to continue."
Armenta said 74 percent of the buyers of the original Zire were first-time buyers.
However, indications from the back-to-school sales season may mean rough holidays, according to retail market tracker NPD Techworld analyst Stephen Baker. The holidays are often the best selling period for manufacturers.
Sales of handhelds were down 30 percent in the month of August compared with last year, according to Baker.
"The reality right now is that it looks like it will be a tough holiday season for handhelds," said Baker, "sales were not good during the back-to-school time."
However, this trio of devices is among the company's most inexpensive round of prices for new handhelds.
Armenta said the £149 Tungsten E is a sort of entry-level device aimed at business users and is meant to grow that audience. The company is also cutting the price of its Tungsten T2 device.
"The E caters to the Palm V crowd, which for the most part has not upgraded, but this lower price with a colour screen might get them to move over," said Burden.
The two Tungsten devices come with personal information management application enhancements, which include new agenda views, improved scheduling, additional fields for contact information and synchronisation of these enhancements with Microsoft Outlook. The enhancements were developed by the hardware division and will be solely for its use.
In related news, the company said on Tuesday that it has set 28 October for a stockholder meeting to vote on the PalmSource spinoff and Handspring acquisition.
