New Palm Vx set for release in October

On October 4, Palm Computing will release the Palm Vx, sources close to the company say. The release of the much-anticipated successor to the Palm V comes at a momentous time for Palm specifically and for the industry as a whole.

This week, Palm's parent company 3Com announced that the handheld computing subsidiary would be spun off from the struggling networking firm. The newly independent Palm will subsequently push for an initial public offering, the companies said.

Meanwhile, Palm licensee Handspring announced its first product, the Visor, a low-price handheld featuring an expansion slot for easy upgrades using add-on cartridges. Handspring was formed by Palm co-founders Donna Dubinsky and Jeff Hawkins.

Both events underscore the growing importance of handheld computers in this new computing era, where technology is increasingly focused on wireless Internet access through devices and appliances, instead of through traditional desktop computers. These devices are expected to include cell phones and handheld computers, as well as set-top boxes.

The new Palm Vx will feature the same slim design of the Palm V, but with expanded memory. While the existing Palm V offers 2MB of memory, the new Palm Vx will feature 8MB of RAM, sources say. The Palm Vx will be priced at US$449, while the Palm V will be cut to US$399. The Palm IIIx is expected to be discounted to US$299.

Palm executives declined to comment on upcoming products.

Palm is constrained from adding many additional features into the Palm V because of its small design, said Brian Philips, a handheld analyst with ARS. "I don't know what you can cram into that form factor," he said, noting that the Palm V could not easily offer the wireless capability of the Palm VII, which is sold with the Palm.net wireless Web clipping service.

Early Palm Pilots featuring less than 2MB of memory were more than capable of handling simple address book, calendar, and note-taking applications. But with thousands of third-party applications already available and interest in memory-hogging digital music and multimedia applications, users have been demanding more resources.

Devices based on Microsoft's competing Windows CE operating system generally feature between 8MB and 32MB of memory. However, although the CE operating system is scaled-down in comparison to Microsoft's desktop version of Windows, the software is more memory-intensive than the Palm operating system--which means users don't actually have access to all resources for applications.

HP's upcoming Jornada 430se, the successor to its first palm-size PC based on the Windows CE operating system, will include 16MB of memory, sources close to the company confirm. The device, which is set to be released in early October, will be priced at US$499.

In addition to increased memory, the new HP device will offer MP3 digital audio software, a stereo headphone jack, support for 65,000 colors, and a faster 133MHz processor. With the Jornada 430se, HP is trying to mimic Casio's success in the handheld market, analysts say.

"They're trying to compete with Casio," said Philips, referring to Casio's popular Cassiopeia E-100, which was one of the first Windows CE palm-size computers to offer MP3 capability and a focus on multimedia features like support for 65,000 colors. "Casio has been the sales and attention champion of the Windows CE market. HP is trying to copy that."

Both the Casio and the new Jornada 430se will compete with Handspring's Visor, which will support add-on cartridges from Diamond Multimedia's Rioport division that will offer MP3 capability, Philips said. "I wouldn't call them totally different markets."

Although Palm and Microsoft face competition in the retail market from Handspring, Palm is by far the most popular product in the market, with over 70 percent market share, according to research firm International Data Corporation.