March 01, 1999, Issue: 235
Section: News
Next-Generation Palmtops Excite Retailers
Paula Rooney
Waltham, Mass. - The arrival of 3Com's next-generation Palm organizers and
competitive CE-based palmtops from Hewlett-Packard and Compaq is
generating enthusiasm among retailers.
3Com's Palm V and Palm IIIx devices, which shipped to retail stores last
week, are already achieving steady sales, retailers said. Both feature advanced
LCD displays and a Microsoft Outlook conduit. The personal digital assistants
(PDAs) generate profit margins roughly in line with peripherals, which yield
slightly higher margins than the dollar amount earned on PCs, retailers said.
J&R ComputerWorld, New York, which dedicated a store window to the
Palm V, sold 67 units priced 99 cents above the $449 suggested retail price
on its Web site during the first day of sale, officials said.
RCS Computer Experience of New York held a coming-out party for
3Com's newest organizers on Feb. 23. "It's selling very well. The Palm has a
very loyal following," said Charles Tebele, chairman of RCS. He predicted
many first-time buyers will pick up the Palm IIIx and veteran users will opt for
the lightweight and more expensive Palm V, which has a rechargeable battery.
The Palm IIIx-enhanced with 4MB of RAM and an Open Connector Slot-is
priced at $369 (SRP).
Providing 3Com with its first tough competition in the PDA market,
Hewlett-Packard recently released the first Windows CE-based palmtop with
a color display, the Jornada 420, at a $420 street price.
Compaq today will ship its first Windows CE-based palmtop, the Aero 2100,
with a street price between $400 and $500. The device features a color
display, a rechargeable battery and a record/playback feature for
downloading audio clips from the Web.
Compaq officials said they will limit initial retail distribution, but are optimistic
that the color display and competitive price tag will make it a serious
contender against the Palm V. "It'll be positioned head-to-head against the
Palm," said Patrick Griffin, manager of mobile products for Compaq. "Our
strategy is not to go too wide in distribution early on. We're starting at a few
retail chains and will expand over time."
Initial shipments of the Aero 2100, which will be widely available at the end of
March, will go to Best Buy, Circuit City and Staples.
Although Microsoft is reportedly giving manufacturers and retailers more
marketing dollars to promote Windows CE in the consumer marketplace, one
analyst is skeptical about whether the palmtop footprint can overcome the
perceived complexity of the Windows CE operating system.
"It's not just the form factor," said Stephen Baker, senior hardware analyst for
PC Data, Reston, Va. "People use the Palm because of ease-of-use. It's not
as easy with Windows CE."
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