Palm Cuts PDA Prices

Palm's Palm Solutions Group has cut prices on three of its most popular handheld computers, chopping the price of its flagship Tungsten T handheld, for example, by 20 percent to $399. The company also dropped the suggested selling price of its Palm M130 handheld to $199 and trimmed the price of the M515 by 14 percent to $299.

Sam Bhavnani, an analyst at ARS in La Jolla, California, said the price cuts are "normal and cyclical" adjustments as Palm readies the introduction of new models, which he anticipates will happen within a week.

The new pricing also brings Palm's products more in line with low-priced hardware running the Pocket PC operating system from Microsoft, he said.

Palm introduced the Tungsten T last fall, initially priced at $499 and discounted since then. The color, wireless M130 and the deluxe M515 made their debut almost a year ago. The M130 carried an introductory price of $279, and the M515 was initially priced at $399.

Other Vendors Trim

Hewlett-Packard has slashed prices on its Pocket PCs, which sold for $700-plus a year ago. HP now offers an entry-level model, the H5450, priced at $299.

Dell Computer sells a Pocket PC-based device for $249, up from its introductory price in November of $199 after a $50 rebate. Dell introduced the Axim at Comdex last fall, joining a selection of budget PDAs.

According to Bhavnani, there is no comparison between the Tungsten T and the Dell Pocket PC. The Tungsten T, he said, is a sleek, lightweight system with built-in Bluetooth wireless capabilities, whereas Dell's Pocket PC is a "brick" with no built-in wireless functionality.

Palm Leads Sales

Palm devices still lead among sales of handheld devices, according to a recent analyst report.

Dataquest, a division of Gartner, reports hardware vendors shipped 12.1 million PDAs and other handhelds in 2002, down 9.1 percent from 2001. Shipments of Palm's PDAs dropped 12.2 percent in 2002.

Still, Palm shipped almost 3 million more units than its nearest competitor, HP, which supports the Pocket PC OS.