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Major new product expected from Handspring next year

MOUNTAIN VIEW, Calif.-Treo maker Handspring Inc. plans to release a “major new product” sometime next year, a device with wireless capabilities that will likely use the newest version of Palm Inc.’s operating system.

The company first hinted of its plans during its third-quarter conference call, and could provide further insight into the device in its upcoming earnings call early next month. That the device will likely use the Palm OS 5 is notable since the new operating system includes integrated support for wireless voice and data capabilities.

Handspring’s current Treo mobile phone/personal digital assistant device uses a previous version of Palm’s operating system, one that doesn’t have integrated support for wireless. However, many in the industry have cited the Treo as a simple and efficient mix of mobile phone and PDA functions. Handspring recently released software for GSM Treo users to upgrade to GPRS networks. The device is available through Sprint PCS, T-Mobile and other carriers around the world.

Handspring is placing much of its hopes on sales of the Treo device, but company executives said that mobile phone/PDA-type devices aren’t as successful as the company had first expected.

“We’re not totally surprised that it’s taking a little while to take off,” said Will Rees, Handspring’s GPRS Treo product manager. “The groundswell is taking a little bit longer than expected.”

Rees said network upgrades and added emphasis on wireless data will likely help drive Treo sales. The company reported 180,000 Treo units sold by the end of the company’s third quarter.

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