VisorCentral.com - Handspring Posts Loss; Pleased with Treo Sales

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Posted by VisorCentral on 04-15-2002 10:49 PM:

Handspring Posts Loss; Pleased with Treo Sales

Handspring just announced its third quarter results, Visor sales weak - 47,000 Treo's shipped, above expectations.

http://www.visorcentral.com/content/Stories/1425-1.htm

Posted by wshwe on 04-16-2002 04:01 AM:

"It's a difficult transition," said Banc of Amercia Securities analyst Rob Sanderson. "The Treo shipments were very strong versus what I was expecting. But obviously the PDA business is pretty horrible."

Sanderson said it looks like Handspring might have actually had negative margins on its handheld business.

http://zdnet.com.com/2100-11-883257.html

HandSpring is basically non-competitive in the basic handheld market. HandSpring should give up all Visor models with the possible exception of the Visor Pro. The Visor line is dragging HandSpring down.

Posted by Toby on 04-16-2002 02:22 PM:

quote:
Originally posted by wshwe
[...] HandSpring is basically non-competitive in the basic handheld market. HandSpring should give up all Visor models with the possible exception of the Visor Pro. The Visor line is dragging HandSpring down.

Handspring has a higher market share than any other manufacturer excepting Palm from what I can tell. The original Pilot didn't happen overnight, so I don't see why Hawkins's Next Big Thing� should appear overnight either.

Posted by dkessler on 04-16-2002 04:41 PM:

quote:
Originally posted by Toby
The original Pilot didn't happen overnight, so I don't see why Hawkins's Next Big Thing� should appear overnight either.

"The company [Handspring] said it estimates 13,000 [Treos] sold through to customers ..."

I don't have the numbers, but I'd be willing to bet that the original Pilot sold way more than 13,000 units in its first quarter - and it didn't launch with nearly the media blitz that the Treo did. It's also worth remembering that the Pilot had the backing of USRobotics and later 3Com - companies that had other "cash cow" products and weren't totally dependant on the Pilot's success for the company's survival.

There's a chance that the Treo could eventually gain the kind of market acceptance that the Pilot did, but it's doubtful that today's investors will have the patience to wait. This isn't a one or two player fringe market the way it was in the early days of the Pilot. It's in the limelight and there's a ton of competition. Handspring doesn't have any other currently successful products to draw revenue from. If Treo sales doesn't make Handspring profitable by Q4, there won't be any money to keep the product afloat while it "catches on".

Given that Handspring put 47,000 Treos in the "channel" last quarter and only 13,000 actually sold to end-users, I don't see how Handspring is going to pull off a turn-around.

__________________
<ul><li>Dave Kessler<br>President - Kopsis, Inc.</li></ul>

Posted by Felipe on 04-16-2002 04:55 PM:

quote:
Originally posted by dkessler

Given that Handspring put 47,000 Treos in the "channel" last quarter and only 13,000 actually sold to end-users, I don't see how Handspring is going to pull off a turn-around.

It wasn't really a quater was it? Isn't it really a little over a month of sales?

__________________
Felipe Garcia
Happy Treo 600 user, so far. Thanx Cingular for having an unlocked phone.

My Treo 600 is my phone, my PDA, my watch, and my MP3 player. Oh yeah, I take a picture once in a while with it. Convergence is such a great thing.

Posted by Toby on 04-16-2002 05:25 PM:

quote:
Originally posted by dkessler
I don't have the numbers, but I'd be willing to bet that the original Pilot sold way more than 13,000 units in its first quarter

I didn't get quite that far in the book yet (they're coping with the USR post-sale effects right now), but if they reveal it, I'll let you know.

quote:
and it didn't launch with nearly the media blitz that the Treo did.

I think you're misunderstanding my point. I'm _not_ saying that the Treo is Hawkins's Next Big Thing�. More on that in a sec...

quote:
It's also worth remembering that the Pilot had the backing of USRobotics and later 3Com - companies that had other "cash cow" products and weren't totally dependant on the Pilot's success for the company's survival.

Exactly why I foresee Handspring going down the same road that Palm Computing had to if they want to survive.

quote:
There's a chance that the Treo could eventually gain the kind of market acceptance that the Pilot did,

Personally I doubt if it will. It's hampered by the deployment of GSM in the states and not being tri-band, IMO.

quote:
but it's doubtful that today's investors will have the patience to wait.

Same as it ever was. Palm Computing was in the same boat when it sold to USR. The palmtop industry really doesn't have that stellar of a track record. The Pilot was the exception and not the rule.

quote:
This isn't a one or two player fringe market the way it was in the early days of the Pilot.

Um, it really wasn't a one or two player market then either, although honestly it's _still_ a fringe market. I think people with PDAs think it's a bigger market than it is for the same reason that most people notice how many cars there are on the road just like theirs right after they buy one.

quote:
It's in the limelight and there's a ton of competition.

Oh come on, Dave. You don't remember all the spotlight on General Magic and the Newton? They got tons of press in the _mainstream_ media. Most of the troubles of Handspring, Palm, et al barely make the front page of the Money section anymore.

quote:
Handspring doesn't have any other currently successful products to draw revenue from. If Treo sales doesn't make Handspring profitable by Q4, there won't be any money to keep the product afloat while it "catches on".

That's the problem with it. If Hawkins really has a Next Big Thing� left in him, it shouldn't _need_ time to catch on. It'll just need some major financing to get it produced. I'm betting Dubinsky's getting tired of the fundraising again.

quote:
Given that Handspring put 47,000 Treos in the "channel" last quarter and only 13,000 actually sold to end-users, I don't see how Handspring is going to pull off a turn-around.

If they do, it'll be the same way that their Palm Computing did: sell to a bigger company. It won't be Sony due to NIH reasons.

Posted by Toby on 04-23-2002 07:05 PM:

quote:
Originally posted by Felipe
It wasn't really a quater was it? Isn't it really a little over a month of sales?

More like two months.

Posted by yardie on 05-03-2002 08:52 AM:

13,000

13,000 units in just about 6 weeks aint bad...considering the unit's price tag. Of course they wont sell as much as the original Palm Pilot..why? Because people have a lot more choices in Palm OS devices. There are now about 4 makers of Palm Devices, each with their own feature sets. The number that you should look at is the dollar amount. The Treo sales so far is about 30% lower than the whole Visor sales (34 Mil for all Visors vs 21 mil for Treo)...that should tell you something.

Posted by Toby on 05-03-2002 01:42 PM:

Re: 13,000

quote:
Originally posted by yardie
13,000 units in just about 6 weeks aint bad...considering the unit's price tag. Of course they wont sell as much as the original Palm Pilot..why? Because people have a lot more choices in Palm OS devices.

The real catch is that it's an apples to oranges proposition. The original production runs for the Palm Pilot were supposed to be 10,000 units the first month, 20,000 the second, and 10,000 the third. Unfortunately, they didn't quite meet that on schedule (which they'd replay with the original Visor release). There's really no way to say for sure whether the scarcity of Pilots didn't make it _seem_ as though the Pilot was a hotter item than it was.

quote:
There are now about 4 makers of Palm Devices, each with their own feature sets. The number that you should look at is the dollar amount. The Treo sales so far is about 30% lower than the whole Visor sales (34 Mil for all Visors vs 21 mil for Treo)...that should tell you something.

Actually, that really isn't a measure of 'success' either (at least not from a business standpoint). How much _profit_ would be the interesting figure. If they're making more profit per Treo than the Visors (which seems feasible), then there's the answer as to why they're phasing out the 'traditional organizer' market.

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