Doing handsprings in the PDA market

You can do all the gymnastics you want, but eventually, you too will be telling your life's details to a handheld device. And Handspring is hoping it's just a matter of time.

If you’re not carrying around one of those handheld organizers, you certainly know people who are. How long will it be before you, too, trust the details of your life to a five-ounce object you can carry in your pocket? If Handspring gets its way, you’ll be doing it relatively soon.

Handspring’s first and foremost claim to fame is its management team; the second is its handheld computer called Visor, a competitor to the Palm handheld.

Handspring was only days old in July 1998 when it received its first venture capital funding on the strength of its executive team of Hawkins, Dubinsky, and Colligan. In 1998, these three “parents of the Palm Pilot” left Palm Computing—which they invented, managed, and marketed to become a huge success in the handheld industry. In fact, Handspring executives claim this invention caught on faster with consumers than the personal computer, color televisions, VCRs, or cell phones.

Handspring’s flagship product—the Visor handheld organizer—is a new competitor to the Palm family of handhelds, the market leader, and the Windows CE handheld. Visor uses the Palm operating system and, eventually, with plug-and-play expansion modules under development, it will be able to change from a mere organizer to a tool that supports a variety of functions, including:
  • MP3 player
  • Instant messenger
  • Digital camera
  • Modem
  • Bar code scanner
  • Two-way pager
  • GPS receiver
  • Video game module

The affordable, plain vanilla Visor ($149 without cradle) comes in graphite only. Visor Deluxe ($249) comes in five sporty colors similar to what Apple is doing with its colorful computers. Additional features on the Visor include an address book, date book, calculator, a world clock, and math support. As a customer service, Handspring’s Web site also includes links to thousands of compatible software applications for the Visor.
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The market
The handheld market is growing rapidly in the business community. Consider these impressive statistics:
  • By 2003, the handheld industry will be a $7.2 billion market (source: Dataquest).
  • Last year, worldwide shipments of handheld devices totaled nearly 9 million units (source: IDC).
  • From 1998 to 1999, sales of handhelds grew by 34.5 percent (source: IDC).
  • The United States accounted for 45 percent of the 1999 shipments, but Japanese and European markets will grow rapidly in the near future (source: IDC).
  • In 2000, IDC expects a market growth of 44 percent.
  • Handspring expects the market for handheld computers to reach 21 million units by 2003.
  • A primary market for personal digital assistants (PDAs) like Visor and Palm includes mobile businesspeople and remote employees. The remote workforce is expected to grow from 35.7 million in 1999 to 47.1 million by 2003 (source: IDC).
  • Dataquest predicts a consumer market for PDAs will begin to grow rapidly in the next few years.

Handspring had trouble keeping up with product demand in the fourth quarter of 1999 and suffered some bad press for that. Delays were as long as two months for product shipments. In the first quarter of 2000, it reduced that wait to one week.

Strategic advantages
Palm Computing, a 3Com Company, supplies the operating system for the Visor, so it is a strategic partner as well as a competitor. Handspring also has recruited several third-party handheld module developers (in contrast to 3,000 developers working on Palm modules, with which Visor will be compatible). The Visor is priced more competitively than Palm’s handhelds, but that could change any day.

Financial information
Handspring is privately held, with venture capital funding from Kleiner Perkins Caufield & Byers (KPCB) and Benchmark Capital. No sales information is available.

Management team
  • Donna Dubinsky, co-founder and CEO
  • Jeff Hawkins, co-founder, chairman, and chief product officer
  • Ed Colligan, vice president of marketing and sales
  • Bernard Whitney, chief financial officer
  • Mike Gallucci, vice president, manufacturing and logistics
  • Celeste Baranski, vice president, engineering
189 Bernardo AvenueMountain View, CA 94043Tel: 650-230-5000Fax:
What others are saying about Handspring
“Jeff Hawkins and Donna Dubinsky had barely resigned their positions at the helm of Palm Computing, then a division of networking giant 3Com Corp., when they snagged the first round of venture money for their next start-up, Handspring Inc. The check, for several million dollars, was made out simply to ‘Hawkinsky.’ The pair had not even developed a business plan for their post-Palm existence. But the venture community already wanted in. And could you blame them? Palm Computing's PalmPilot ultimately sold faster than the videocassette recorder, the color TV, the cell phone, even the personal computer that was its great-grandfather.”

—"Palm Pilot Team: Donna Dubinsky; Jeff Hawkins; Ed Colligan ," by Heather Clancy, Computer Reseller News, Nov. 10, 1999.
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