3Com Cuts Palm Pilot Prices

3Com's Palm Computing division discounted its Palm III and PalmPilot Professional Edition, the company announced today. Palm Computing is expected to release two new products at the end of the month, and today's price cuts make room for the new higher-end products. The company filled one of its open management positions earlier this week, when it tapped Robin Abrams as president of Palm Computing.

PalmPilot pricing has fluctuated over the last two months, with vendors such as Buy Comp.comoffering the device for as low as $250 over the holidays. But by last month, prices had stabilized, rising back up to around $300, according to Ron Hauwert, product manager at Insight.com. "The pricing [from 3Com] has been consistent, but people were using it as a loss leader [during the holiday buying season]," Hauwert said. Insight currently lists the Palm III at $334, but will be adjusting its pricing later today, he said.

The Palm III, which was discounted today from an estimated retail price of $369 to $299, is expected to be joined by the Palm III X, a "power user version of the III," in late February, according to a source familiar with the product. The Palm III X will feature 4MB of memory, a clearer display with less reflectivity, a Microsoft Outlook conduit, and open connector slot for expanded memory, modem, and pager cards. The new device will retail for $369, taking the place of the Palm III.

During the same time frame, Palm will release the Palm V, a sleeker device targeted at the high-end market. The Palm V will feature only 2MB of memory, but is expected to be slimmer and smaller than existing PalmPilots. The device, code-named Razor, will also include a rechargeable lithium ion battery capable of up to one month of use. The Palm V will be introduced with a retail price of $449.

Although Palm currently enjoys 72 percent of the personal companion market, according to market research firm International Data Corporation, the next few months may prove critical to the company's long-term success. Palm faces new challenges from Microsoft and manufacturers of its Windows CE devices, which will be available with color displays and lithium-ion batteries this spring. IDC projects that Windows CE palm-size PCs will gain market share over the next few years, accounting for 55 percent of the market in 2002.

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