Palm Unleashes the Tungsten Twins

Two new handhelds debuting Monday from Palm target what the company calls “Power Users” and are expected to compete with just about everybody else making a digital organizer or smartphone.

Milpitas, Calif.-based company’s two new high-end models, the Tungsten ‘T’ and the Tungsten ‘W’ are part of Palm’s revised marketing shift from numeric identities like the Palm i705 or the Palm m500 into more marketable names like Zire and now Tungsten.

While the Zire is more of an entry-level Palm, the Tungnsten twins are for business class user, the type that would have bought a Palm V when it first came out.

The company said its earliest converts to the two new PDA are entrepreneurs, telecommuters and executives who are dependent on mobile devices. Palm estimates some 37 million people fit this description.

Palm says its new devices are expected to compete with other wireless communicators like the Handspring Treo or the RIMM Blackberry. Palm said it would ship the devices first in Europe and then in the U.S.

“This is not a replacement for a mobile phone,” said Palm senior product manager David Christopher. “We don’t see people trying to use this to make a call while traveling down the highway. But if you are sitting in the airport and want to review a presentation, respond to e-mails and make a call, this would be the device for you.

Palm is taking an interesting approach to advertising its new wares. The company said it is opting for a $10 million nationwide advertising campaign, mostly in general interest and women’s magazines, to publicize their devices including its new Zires and Tungstens. The company said it would also set up kiosks in several shopping malls where people can check out their PDAs. The Westfield Shoppingtown Valley Fair in San Jose has been designated as the premiere launch site.

During the last three months, Palm said it shipped around 819,000 Palm branded devices, bringing its year-to-date shipments to nearly 19 million. According to Internet marketing research group NPD, Palm’s market share in U.S. retail was 59 percent as of Aug. 25.

That lead is being whittled away by the likes of other PDA makers and the new gadgets are premiering at a time when handheld industry data shows that sales are down nearly 1 percent in the third quarter. According to Gartner Dataquest, worldwide PDA shipments only hit 2.6 million units. Palm, Hewlett-Packard and Sony lead the pack, making up 58 percent of all handheld shipments in the last three months. Palm surpassed 30 percent market share, while Sony and Toshiba showed the strongest growth.

Dell Computer also says it will enter the handheld sector with it own device next year.

“Palm is not as dominant as it once was, but it still shipped more than twice as many units in the third quarter,” said Gartner Dataquest analyst Tokk Kort. “Sony PDA shipments have nearly tripled since the third quarter of 2001, and it is on the heels of HP, contending for the No. 2 position. Sony have been averaging about one new model launched every month of 2002.”

Palm still commands more than 50 percent market share in handheld operating systems, but they are facing increasing competition from Microsoft , whose Windows CE PDAs hold 28 percent of the market, according to research firm, Gartner Dataquest.

Critics said the PDA maker had to make some changes to its product lineup or continue to lose market share, so Palm did.

The Tungsten T, retailing for a whopping $499, finally debuts the long awaited Palm OS 5 over a 144mHz Texas Instruments OMAP1510 ARM-based processor with 16MB of on-board RAM.

The ‘W’ has an internal GSM/GPRS radio with Class 10 GPRS capabilities and a built-in keyboard. The units are expected to retail for $549 without wireless service. However, service providers reportedly will subsidize the cost for signing up for their Internet service. Palm said it will announce carrier partners at a later date.

Both devices include a 320×320 color display and an internal Bluetooth wireless chip. Visually, there is a 5-way navigation controller and four shortcut buttons that skip to the basics like to-do list, address book, calendar and note pad. The faceplate on the Tungsten ‘T’ also slides down to reveal the Graffiti pad and there is a one-touch voice recording button.

Christopher said the Tungsten T’s Bluetooth capabilities allow it to conduct SMS messaging as well as auto dialing a separate Bluetooth phone through the PDA’s address book.

But, unlike the ‘T’, the ‘W’ operates on Palm’s previous OS 4.1.1 operating system over a 33mHz Motorola DragonBall VZ processor.

While ARM-based chips are gaining high marks in the mobile world, Microsoft recently signed up Motorola’s DragonBall processor family to its list of chips that support Windows CE, Microsoft’s PDA operating system.

Initially, 35 third-party software and hardware developers, including IBM , Oracle and Siebel Systems filed in behind Palm to show off their compatible applications and accessories for the two new devices. More are expected to follow, especially the Tungsten ‘T’ for its Palm OS 5 operating system.

Palm Monday also released its new Tungsten Mobile Information Management (MIM) server product. The platform offers secure wireless e-mail and groupware access. It is designed for use with Windows NT and 2000 platforms to sync with the Palm i705 and the Palm m500 series. The company would not say if the MIM server technology would be extended to the two new Tungsten handhelds or other future Palm products.

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