Palm Drops Prices On 5 Handheld Devices

Amid a declining handheld market, Palm has lowered the prices on five of its popular devices.
Amid a declining handheld market, Palm Inc. has lowered the prices on five of its popular devices.

The cost reduction, which ranges from 34% to 11%, is designed to boost Palm's flagging sales in a down economy fraught with corporate scandal and a lack of consumer confidence.

"This price reduction is designed to bolster sales of Palm handhelds and create additional demand for the PDA category," says a Palm spokesman. "Historically, the summer months are a slower time for PDA sales and most suppliers use this as an opportunity to create additional product demand through special programs or discounts or to re-price older models."

The announcement comes this week just as International Data Corp., a Framingham, Mass.-based analyst firm, announced that the handheld market is sharing in the economic slide. Palm retained its top spot in the market with 32.4% of handheld shipments but HP and Sony are catching up, according to IDC numbers.

IDC's study shows that Palm shipped 845,640 handheld units during the second quarter. That accounts for a decline of 33% from what the company shipped the first quarter of the year.

Palm said that of Thursday, July 25, the company re-priced the:

  • Palm m105 to $99 - a 34% decrease;
  • Palm m125 to $169 - a 15% decrease;
  • Palm m130 to $249 - a 11% decrease;
  • Palm m500 to $199 - a 33% decrease, and
  • Palm i705 to $399 - a 11% decrease.
  • Analysts have been expecting growth in the handheld enterprise market next year. They're expecting that the enterprise will finally start buying and deploying handheld devices, turning what has been the geek's gadget into the makings of an enterprise powerhouse.

    Part of the enterprise boon is being laid on IT administrators who are looking for more control of what's moving around on their network. So far, workers have been mostly buying their own handheld devices and connecting them to their desktops or laptops without IT approval or cooperation.

    But enterprise adoption, though it may be handy and good for production, won't be a cheap deal.

    A recent Gartner Group study showed that each handheld device drains about $3,000 from a company's IT budget every year. The total cost of ownership for a handheld device, whether it's a Palm Pilot, smart phone or Blackberry, is higher than that for a laptop. Phil Redman, a research director at Gartner, blames the higher PDA costs on a mixture of reasons, ranging from evaluation costs to administration, training and maintenance.

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