Scan your PC for monstrous errors now - Free scan! Look Mac, I'm just gonna tell you once - you have to back up to the web with XDrive Try it free

Miss your computer while away from home? Cheer up, GoToMyPC lets you access it from anywhere.

Learn How with Cyberwalker's Video Demos: Take your old records off the shelf and rip them to MP3 files. Learn step by step with a video how-to

Adding RAM is easy, learn how

Find out if there are bugs in your system. Click for a free scan with Registry Booster.

TECH TO GO

Handheld computer price war, a boon to consumers

(for Canadian version click here)

By Andy Walker, Cyberwalker Media Syndicate

There has never been a better time to buy a handheld computer. This thanks to a price war sparked by Palm Inc., which has been dumping discounted gadgets on the market this year.

The glut came when the company overstocked components for devices last fall. It was expecting a sales boom of the devices to continue into 2001. Then came the economic downturn and demand dropped.

So the company slashed prices to move older product to make room for its new Palm m500 and m505 handheld computers, introduced in the spring.
That's resulted in some real deals on the devices. Palm cut its wirelessly enabled Palm VIIx from $449 US at the beginning of the year to $199 US. A further rebate of $99 US can be had with a one-year subscription to the company's Internet service. Palm also cut prices the Palm Vx from $349 US to $299 US. The budget-end m100 was discounted from $149 US to $129 US.

"Palm vastly overestimated market demand when things were rosy. Now I believe there may still be a quarter's worth of inventory of older models, sitting on distributors' shelves," said Warren Chaisatien, an IDC analyst.
"The glut is not only stalling sales of all models but delaying new product introductions by as much as two quarters," he speculated.

The fire sale has given Palm an opportunity to do some price experimentation in North America. In Toronto, for example, one retailer slashed pricing on the Palm IIIxe from $175 US to $130 US ($249 Canada to $199 Canadian). The results were surprising.

"The difference in price produced triple or quadruple sales," said Michael Moskowitz, Palm Canada president.

This kind of behaviour is good news for consumers because once prices have been cut it's hard to jack them up again.

Handspring, Palm's most successful licencee, has had to respond with its own set of price cuts.

For example, the Visor Deluxe, which originally cost $249 US was dropped to $199 US. Similar savings are available on Handspring's other products.

They've even introduced a $100 trade-in discount on their swanky Visor Edge through their web site at www.handpsring.com.

The price war isn't hurting Handspring as badly as Palm. "Overall, Handspring is in better shape because their inventory problem is not as severe and their price cuts are not as steep," said Chaisatien.

Hewlett Packard also implemented price cuts. The Jornada 548 Pocket PC was launched at $549 and got a price cut late last fall to $479 and then again to $449 in April. An HP spokesperson said this was to attract "cost-conscious consumers who want multimedia features relative to what the Palm offers." This is an effort to go head to head with Palm's top-end device, the m505.

Meanwhile Compaq has held their prices steady at around $499 on their comely iPaq Pocket PC. This is due to an artificial demand the company created when it couldn't deliver product to consumers after it was introduced last summer.

"We're just starting to meet demand and that's a happy thing," said Pam Norton, a Compaq product manager of Internet products and services. "Since there's a strong demand there's no need to cut prices."

This fall another factor comes into play. Wireless technologies, including 2.5 G cellular phone technology and Bluetooth short-range wireless networking, may kick start a renewed interest in the handheld computer market. Once a device can get e-mail and information from the Web wirelessly, people may start to see them as more than just personal information managers.

Wireless will also give the gadgets cellular phone functionality, perhaps driving some former wireless phone customers to trade their handsets for the devices. The new handheld computers will be able to do voice either through a snap-on sled or via an earphone/microphone accessory plugged into an expansion card slot.

Since cellular phone companies will be bundling the devices with service packages, expect to see attractive price cuts. Carriers traditional sell their phones at a loss and make up the shortfall with service contracts. They are expected to do the same with wireless handheld computers.

There will be a day when handheld computers drop below $100 US, but not until some fundamental technology problems are solved.
An industry insider speculated that the $100 US handheld device will come from Palm in time for Christmas.

According to Michael Mace, Palm's Chief Competitive Officer, it's not possible to drive the price below $100 US without pulling some key features from the device. Palm would have to axe the infrared port, which is used to beam a business card to another Palm, or to connect to a cell phone's Internet connection. They'd also have to remove backlighting from the screen.

Mace figures that one of most expensive components in Palm devices today is the screen. New cheaper screen technology is on its way. Palm is aggressively pursuing the use of electronic paper screens, said Mace.
These are new displays being developed by the Xerox spin-off Gyricon Media and E Ink Corp. Both are developing electronic paper technologies.
That's where a piece of paper is coated with millions of tiny balls floating in liquid capsules. The balls are rotated with electrical impulses. When the black side of the ball is up, it looks like a pixel. When the white side of all the balls is up, the screen appears blank. Red, green and blue coloured balls could also be used to create colour screens. The technology promises to provide very low cost and low power screens.
Those savings will not be realized until 2003.

Earlier this month, a collaboration between Philips and E Ink produced a prototype handheld computer display at the Society for Information Display Symposium in San Jose.

The companies say they are working with device makers to co-develop and design electronic ink displays for PDAs, mobile phones, electronic readers and e-mail devices.