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Qualcomm bungs Handspring a $10m bonus

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Cellular headbangers Qualcomm today made a $10 million investment in PDA manufacturer Handspring. Handspring hinted that the money may also be used to make "complementary" acquisitions.

Handspring has long seen the converged device as the future, and has adopted the "communicator" description introduced by Nokia five years ago for its first 9000 series device. Qualcomm is the CDMA intellectual property powerhouse, and perfected an uber-aggressive, patent-it-and-sue approach to exploiting its R&D long before anyone had heard of RAMBUS, Inc.

But Handspring's devices to date have been based on the global GSM standard, rather than the CDMA air interface used in the US and Korea. So although the Visorphone and the Treo can be used anywhere in the world, and have the huge bonus of being interoperable with the wireless world's killer app, SMS text messaging, Stateside users only get a choice of one carrier per region if they plump for the Treo. So by adding CDMA to its handhelds Handspring should get access to more carrier customers, and Handspring mavens get more choice of carrier.

Handspring already licenses CDMA, executives said today, but the investment makes a CDMA-enabled device likely sooner rather than later.

Two PalmOS-based smartphones using CDMA are on the market from Samsung and Kyocera, and Sprint uses Handspring's Blazer minibrowser on these handsets. A joint venture between Palm and Nokia to produce a TDMA smartphone was canned earlier this year, but this week Palm said it license Texas Instruments' OMAP platform which Handspring used in its Treo, and which includes GSM and GPRS stacks in the bundle.

Handspring also announced that it was raising new capital by creating additional stock worth $38.5 million.

Merger symmetry

Could Handspring's acquisition list include Palm?

Both Palm and Handspring stock has had palpatations on the back of rumours suggesting Handspring could merge with the former mothership.0

The $48.5 million of new capital is some way short of the $1.8 billion market cap for Palm, Inc. But by a weird coincidence, the result of this week's respective wireless deals sees Palm adopting the same wireless platform as Handspring, and a complementary CDMA alliance neither party had before.

For the record, we can'tsee why Handspring would want to acquire Palm's problems. While Palm has fallen far behind in the technology race, and is obliged to play catch-up, Handspring has proven nimble enough to cut its own deals. However, when Nokia and Motorola begin to introduce ship their 2.5G smartphones late next year, the two could decide they'd be better off as one. Until then tongues will continue to wag. ®

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