Palm Computer Rival Handspring Files for IPO
Handspring Inc., the hand-held computer maker started by the people behind the popular Palm personal organizer, filed to raise as much as $300 million through an initial stock sale.
Handspring, which last September unveiled its Visor hand-held organizer to compete with Palm, filed with the Securities and Exchange Commission to sell common shares. The number of shares the Mountain View, Calif., company intends to sell and their price will be disclosed later.
Handspring was founded in 1998 by Chief Product Officer Jeffrey Hawkins, who invented Palm Inc.’s Palm computer, and Chief Executive Donna Dubinsky, known as a marketing whiz who helped make the Palm organizer into the most successful hand-held computer, with more than 6 million devices sold to date.
“They’ve got a body of knowledge and experience that’s hard to match in the industry,” said Mike McGuire, an analyst at market researcher Dataquest.
Handspring’s Visor operates much like a Palm hand-held device, though it includes a slot that lets users insert cartridges that allow the Visor to perform like a pager, music player or other device. The Visor uses the Palm OS operating system.
For several months after the Visor was unveiled in September, Handspring buckled under demand that was greater than it had anticipated. The company tripled its work force and boosted production to overcome the difficulties, which included shipping delays and a sometimes-faulty Web site.
The result: $15.8 million in revenue by Jan. 1. Net losses for that previous quarter were $11.4 million, reflecting in part the cost of hiring people to develop new products.
Handspring this week said it fixed the problems earlier this year.
Three big retailers have just begun to sell the Visor: Best Buy Co., CompUSA Inc. and Staples Inc.
Handspring said it believes the market for hand-held computers is in its early stages and that consumer demand will be stoked by the emergence of more powerful devices that can do more.
Hawkins, 42, and Dubinsky, 44, spent years developing and marketing the Palm organizer at the company that today is known as Palm Inc. Palm previously had been a subsidiary of two larger companies: U.S. Robotics Corp., which bought Palm in 1995, and 3Com Corp., which bought U.S. Robotics in 1997.
Palm went public last month with its own IPO.
To be sure, Handspring faces challenges. One is that the company is largely dependent on the appeal of its expansion slot, said Jill House, an analyst at International Data Corp., a market researcher.
Handspring said a key part of its strategy is to focus on developing more hand-held computer products, such as for the wireless and Internet access markets, the filing said. It also plans to license its slot technology to other companies, the filing said.
Handspring hired Credit Suisse First Boston, Merrill Lynch & Co., Donaldson, Lufkin & Jenrette, and U.S. Bancorp Piper Jaffray to market its shares to the public.
