Handspring Rebate Is Latest Weapon In PDA Price WarHandspring Rebate Is Latest Weapon In PDA Price War

Handspring Inc. has tightened its grip in the ongoing pricing tug-of-war with Palm Inc. Starting June 8, the company is offering a $100 rebate on the Visor Edge--bringing the price to $299 with the trade-in of used handhelds from Visor or other personal-digital-assistant manufacturers. That includes those based on the Palm, Windows CE, Pocket PC, and Psion operating systems. Sharp or Casio PDAs that are based on their own operating system are also acceptable.

Consumers can participate in the rebate program through Handspring's Web site (handspring.com/promos/tradeup.jhtml) or at TECHXNY (formerly PC Expo), from June 26 to June 28, in New York. The program is slated to run through July 1, but Handspring could opt to extend the program, says a spokesman.

One consumer wanted to know if he could trade in a Newton with a cracked screen. "Absolutely," says the spokesman. "I thought they'd keep the Newton as a collector's item." But company has to draw the line somewhere. The trade-ins must have some sort of organizer capability such as a date book, he says: "We won't accept calculators."

To bring new Handspring customers into the fold, Visor owners can obtain the rebate by giving away their used model instead of trading it in. When consumers enter the serial number of the Visor on Handspring's Web site, as well as their name and E-mail address, they'll receive an instant $100 discount for the Visor Edge at the online checkout.

Handspring says consumers have been asking for a trade-in program since day one. But analysts point out that the company must keep pace with Palm's price slashing--a result of its efforts to reduce excess inventory that could top $300 million by the end of this month. Palm went overboard acquiring inventory of older products during the winter, then made the mistake of touting its new expansion-slot m500 series months before it was ready to ship. The result: stalled sales of older products. "In short, it was a disaster," says Charlie Wolf, analyst at Needham & Co. To illustrate how dramatically the company has cut prices, witness the Palm VIIx--priced at $449 earlier this year, it can be had today for $199. Handspring is forced to respond because it makes a Palm OS product, says Wolf.

Palm quit making its older products in April, so its inventory glut will be liquidated eventually, but it may take months, he says. "As long as that's the case, there will be pressure on [PDA] pricing, particularly in the Palm OS segment of the market."