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Handspring Switching To Communicators

Handspring is transitioning out of the handheld business and into the business of creating multi-function wireless communicators such as the forthcoming Treo, CEO Donna Dubinsky said Tuesday.

In addition, component shortages may cause some delays in the launch of Treo, she said.

Dubinsky made the comments during a conference call discussing the company's financial results for the previous quarter. Those results reported a loss of just under $20 million on revenues of $70.5 million. That represented somewhat better results than Wall Street expected.

Overall sales for the quarter increased 15 percent compared to the previous quarter but were down 30 percent from the same quarter a year earlier. Handspring joins Palm in reporting both losses for its most recent quarter and results that, nonetheless, were better than expected.

As reported by Reuters, Dubinsky said the shortage of a specific component, which she would not name, caused the start of manufacturing of the device, which combines PDA and GSM telephony capabilities, to be "slower than we would have liked."

She did not say whether deliveries of Treo, which were expected to begin within about a month, will be delayed. She did say, however, that the first deliveries will be in Europe, where GSM wireless systems predominate. The initial Treos are designed to work with GSM systems with versions for CDMA-based systems, which are more common in North America, to be delivered shortly after initial launch of the product.

She also told the conference that Handspring will eventually get out of the business of making handhelds.

"We are a company that is transitioning out of the organizer business and into the communicator business," Reuters reported Dubinsky as telling the conference, "At some point, we will have transitioned out of the organizer business."

In a separate statement, she added that, "We believe the future of the handheld industry lies in wireless communication, and we are investing our resources accordingly."

In that statement, Dubinsky also said that, despite the loss, the just-finished quarter was a good one both in terms of meeting sales and channel goals and an infusion of cash from CDMA technology vendor Qualcomm.

"We were able to achieve our business objectives for the quarter," Dubinsky said. "We participated well in the holiday demand, and exited the quarter with channel inventory within our target range. We also strengthened our balance sheet with an additional $47 million in cash through a follow-on stock offering and an additional investment from Qualcomm."

Dave Haskin is managing editor of allnetDevices.com.