HP to challenge Palm with smaller and cheeper iPaq

HP plans to take on Palm Inc with a smaller and cheaper version of its iPaq

handheld computer in time for the holiday season. The move would put iPaq

squarely in the price range of Palm, which pioneered the handheld industry and

uses its own software platform.

Cindy Box, HP’s Marketing Director for handhelds, says that the new iPaq

would be launched in time for holiday sales and mark HP’s entry into the $200

to $400 range, which represents about half the market in unit sales. At present,

the cheapest iPaq has a suggested price of about $400, although some retailers

discount it.

Handheld

device unit shipments fell 10 percent in the second quarter from a year earlier,

according to IDC, with analysts saying consumers are waiting for the economy to

improve and vendors to offer more compelling products.

HP’s iPaq, inherited from Compaq Computer Corp in the companies’ May

merger, held 19 percent of the 2.6-million-unit second-quarter market, while

Palm led with 32 percent, as reported by IDC. HP’s new low-end offering is a

slim, silver-colored computer similar in size and layout to the sleek Palm V,

which is a design standard in the category, and has a bright color screen and

expansion slot.

In addition, HP will launch a new high-end iPaq with integrated WiFi wireless

connectivity and an integrated fingerprint reader for security.

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