Handheld device maker Handspring has moved into new territory as it launched its PDA (personal digital assistant)-cum-phone, called Treo, in Hong Kong on Tuesday.
Hong Kong is the first country in the world to have Treo available on the shelves and Singapore will follow soon after, even though Handspring has already made public deals with service providers in Europe and has introduced the product there, Handspring officials said.
According to Bill Holtzman, International vice president at Handspring, Treo, in Asia, will be available through service providers, such as Hong Kong-based SmarTone Mobile Communications Ltd., and Singapore Telecommunications Ltd. (SingTel) in Singapore, in addition to Handspring's usual hardware resellers and distributors.
"We will leverage our relationships with existing computer distributors and plan to make new (telecommunication) operator relationships to expand our reach," Holtzman said, adding that Handspring's strategy is to attack the market from two angles.
The Treo 180, with monochrome display, will retail at HK$4,380 (US$562) in Hong Kong, and there are no plans to offset that price tag even with service activation, Holtzman said.
"There are different traditions around the world on the amount of subsidies service providers offer, and historically, Hong Kong (and most of Asia) don't have very big subsidies for reasons such as already cheap air time," Holtzman said.
This practice is in stark contrast to the U.S. and Europe where handset subsidies can go from US$100 up to $200, he said. "It's all about competition. Once a service provider begins to offer reduced rates, the others will have to follow."
Although the Treo is rather pricey compared to regular PDAs or mobile phones, Handspring believes that the product's "cross-over functions," between a phone and PDA, is good enough to make users fork out the cash.
At the same time, Treo has been criticized by some in the industry for not having an expansion slot for Secure Digital (SD) or Multimedia (MMC) cards, or an expandable Springboard platform, which had initially made Handspring handhelds attractive to users.
However, creating a lightweight and small product was Handspring's "number one consideration," said Holtzman. Treo weighs 147 grams, and is as big as a deck of cards, he said.
"Adding a Springboard slot would make it a lot heavier and bigger," Holtzman said. "We wanted to come up with an acceptable size for a telephone, so we had to deal with demanding weight and size constraints."
The Treo 270, a similar product but with a color display, will be available in the summer, Holtzman said. All handsets are GPRS-enabled, although development for GPRS software is still underway and will be available, via free downloads, in the second quarter of this year, he said.
According to analysts, the hybrid product is a leap-of-faith for Handspring. "It could either make or break Handspring this year," said Manny Lopez, Hong Kong-based market analyst of personal systems research at IDC Asia-Pacific.
"Overall sales for PDAs were bad in 2001, and although Handspring is going into a different market, it's a big gamble for them," Lopez said.
According to IDC, Handspring had 14.9 percent marketshare in the U.S. handheld device market, and 12.6 percent in Europe over the first half of 2001, although its Asia-Pacific marketshare was a mere 1 percent, and it is unlikely to capture China, the region's largest market.
"I don't think (Handspring) will ever be big in China because of the cheaper, local products that are available," Lopez said. "With prices ranging over $500, and even more with taxes, it's way too much for the price-sensitive Chinese market."
IDC is a subsidiary of the International Data Group, the parent company of the IDG News Service.