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Palm Unveils New Modular Handheld Products

Palm Inc. on Monday will unveil two new handheld products that will incorporate secure digital modular capabilities similar to the flagship technology used by its closest competitor, Handspring Inc.

By Sunday afternoon, Palm already posted some of the product specifications on its Web site.

"An innovative expansion slot makes it simple to increase memory, back up data, and add new applications without sacrificing memory space. Use the Palm Universal Connector to add a portable keyboard, camera, or wireless modem," Palm said on its site.

The new products will be dubbed m500 and m505 -- a brand extension of its recently announced m100 and m105 lines, which feature bundled Internet connection software, cradle enhancements and ever-expanding memory for additional applications and data.

However the new m500 line is also expected to include secure digital expansion slots, similar to the ones used by Handspring. When adapted with the proper module, those slots -- a big differentiator for Handspring -- allow the handheld device to function as a phone, camera, MP3 player, etc.

In essense, this could represent the first time that the teacher (Palm) is borrowing from the student (Handspring). Handspring has always licensed its operating system (OS) from Palm. Of course, Handspring also could arguably be considered the teacher seeing the company was created by the inventors of the PalmPilot (Palm's predecessor).

In the truest example of coop-itition, Palm still recognizes OS licensing revenue from its competitor. But late last year, speculation began to surface that Handspring was experimenting with a Microsoft's OS platform, similar to that of Casio and Compaq. To be sure, those rumors have not been substantiated.

Last Monday, Handspring unveiled a super-thin version of its Visor in a metal casing. Now, this latest addition to the Palm family puts its product offerings in a nearly deadheat with Handspring in terms of functionality.

Palm's new line also features the v4.0 OS, slimmer designs and longer battery life, compared with the Palm Vx. The monochrome m500 model will likely retail for roughly $400 while the color m505 has a suggested retail price of $449.

According to trade reports, the devices will not be in stores until late April or early May.

Palm officials weren't available over the weekend for comment.

Vik Mehta, analyst at Goldman Sachs, believes the company is wise to adopt a similar marketing initiative especially given the company's success with its m100 in direct competition with Handspring's Visor.

"We believe that Palm is going to continue with the 'm' branding initiative with its two new products," Mehta said in a research report.

Elsewhere in the handheld market, CNET reported that Hewlett-Packard plans to introduce a cheaper version of its Jornada handheld on Wednesday at a trade show in Germany. The new product, Jornada 525, will likely become the cheapest color handheld that runs on Microsoft's Pocket PC operating system.