Palm Chops Price on Palm VIIx

Palm is slicing the price of its PalmVIIx from $299 to $199. The move comes less than a week after Handspring cut the price of its competing Visor Deluxe handheld to $199. Palm is also offering a $100 rebate to customers who buy a Palm VIIx and sign up for one year of Palm.Net wireless service at either $24.99 per month for a limited amount of airtime, or at $44.99 per month for unlimited airtime. The rebate is good through December 31, Palm said in a statement.

On Monday, Handspring announced that it would cut the price of its Visor Deluxe from $249 to $199. Handspring is also including a free case with the Visor. Handspring's offers only run through June 17.

Palm last cut prices on its handheld devices last month, when it dropped the m100 from $149 to $129, and the color IIIc and black-and-white Palm Vx to $299 each.

The Last Round of Cuts

However, this is likely to be the end of the price cuts for now, says Kevin Burden, an analyst with IDC. "It can't go much lower. Handspring only cut prices because Palm cut prices, and Palm only cut prices to move inventory."

If either company makes further cuts, the impact on either one could be detrimental to long-term success, Burden says.

Palm lowered prices mainly to move the Palm VIIx out, because word on its successor, due in the fall, has leaked, Burden says. "They're using these cuts to push the Palm VIIx out before the news of the upgrade becomes common knowledge to the general public," he says.

No Impact on Pocket PC Pricing

The battle between Palm and Handspring, both of which run Palm's operating system, is not very likely to carry over to devices running Microsoft's competing Pocket PC operating system, because the devices have different markets, he adds.

"But what we have seen is Compaq and HP coming out with Pocket PCs that are priced at a more attractive level." The "more attractive" price point for those devices is under $500, Burden says.

"They realize that the price point may have been a deterrent to wide-scale adoption," he adds.