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Palm launches $99 PDA

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Palm has launched a PDA which breaks the $100 price barrier for the first time for a new offering from the company. The Zire is also the lightest model has offered (although it's a half a centimeter thicker than the Palm V/505) . Palm will sell the Zire direct from its website and through general stores, rather than through the more traditional electronics retail channel.

At the low-end, Palm currently offers the m105 model which is typically discounted to $99, but this is more full featured than the Zire. The m105 has a greyscale screen to the Zire's mono display, 8MB of memory instead of the 2MB; and takes standard AAA batteries rather than the Zire's built-in rechargeable battery. Neither model is expandable.

It's important to Palm for a couple of reasons. Palm wants to expand the market for users who want basic calendar and to-do functionality. Conventional wisdom suggests that this market is already saturated - the PDA market has been shrinking, down 16 per cent sequentially, according to IDC - and it follow that everyone who wants one has already got one, and that this is a replacement market. Palm doesn't entirely buy that - and hopes that this can grow the market further. It succeeded when it first introduced its low-end m100/m120 series, but it lost a lot of money doing so.

The second is about perception. A major fear stalking Palm HQ is that the $300 Pocket PCs we're beginning to see from Microsoft OEMs will give the platform the kind of boost it hasn't yet achieved. Palm's color m515 model currently retails for around $350, and it loses out to PocketPCs on functionality. But plus ca change: Pocket PC has won feature list head-to-heads for two years without achieving dominance in the market, because the one thing Palm PDAs did well, they did very well indeed.

A $99 Palm helps with the perception that Palm handhelds are affordable. Palm is unlikely to want to get into a price war with Pocket PC at the high-end, but it does need to start offering compelling features over and above basic PIM: like the seamless messaging over packet data offered by Danger's new HipTop. This involves either opting for a communicator, like the Treo 300 and 270 which support 2.5G networks, or for a Palm with Bluetooth that can talk to a GPRS or cdma2000 1X phone. Or both. Palm has hinted to us that Bluetooth will be integrated into future models, and if the software can handle websites and email attachments as well as the Hiptop, it should give the platform a new lease of life.

Even ancient, defunct PDAs can benefit from this. ®

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