Handspring Reports 3Q Results, New Smartphone in Fall

Handspring has reported the results of its third quarter of fiscal 2003, and announced it is developing a "a significant new product due this fall." Handpspring also announced a agreement with European communications company Orange, to develop future smartphones designed for the Orange network in Europe.

Revenue for the third quarter of fiscal 2003 was $30.8 million, down from $47.8 million in the second quarter of fiscal 2003 and from $59.7 million in the third quarter a year ago. Revenue for the quarter included $21.1 million in communicator sales and $9.7 million in sales of organizers and accessories.

HandspringOn a GAAP accounting basis, net loss for the period totaled $90.4 million, or $.62 per share as compared to a net loss of $12.3 million, or $.08 per share in the prior quarter. Excluding restructuring charges for the companies Sunnyvale lease of $75.9 million and amortizing stock based compensation, the net loss for the quarter was $12.8 million, or $.09 per share.

Handspring and Orange Partnership
Handspring also said it has signed an agreement with Orange SA, one of the world's largest communications companies, to work together to develop future smartphones designed for the Orange network in Europe. The companies are working closely together to develop advanced business and personal smartphone solutions that will tie seamlessly into Orange back- end network. The first products are expected in the fall.

"significant new product due"
"We've continued to grow our Treo installed base through a difficult quarter, reaching 180,000 customers, while investing in a significant new product due this fall," said Handspring CEO Donna Dubinsky. "The near-term outlook will be challenging due to a weak economic environment and lower-than- expected sell-in of current products for the coming quarter."

Handspring said it currently has enough cash on hand to fund the rollout of new products through the end of 2003. As of March 29, 2003, Handspring's unrestricted cash and short-term investments totaled $53.2 million, down $12.5 million sequentially. The full financial details can be found here.

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The clock...is ticking

hoodoo @ 4/16/2003 1:03:17 PM #
First post! :)

They have enough cash to fund a rollout in 2003. Then what? Their new Treo 360 or whatever it will be called better be sharp!

I'm keeping my shares until the bitter end, no point selling them now. :(

RE: The clock...is ticking
NikMan @ 4/16/2003 1:35:23 PM #
I hope Treo will be GSm and CMDA and even better the new Samsung smartphone? Handspring you are otherwise dead.

I hope you have enough guts to do it well. You did it time ago and now it's tome to come back!

RE: The clock...is ticking
kevdo @ 4/16/2003 2:20:32 PM #
>or whatever it will be called

Duo anyone?

-Kevin Crossman

RE: The clock...is ticking
RhinoSteve @ 4/17/2003 1:39:53 AM #
It will be called the JD/LDB-100

"Jeff & Donna's, Last Dying Breath, model 100"

Aquisition?

HeavyUser @ 4/16/2003 1:48:00 PM #
I smell an aquisition here. Palm buys Handspring??

RE: Aquisition?
popko @ 4/16/2003 2:14:59 PM #
Nah, why would Palm SG need HS in its current state?

So unless HS can something (new product that eveyone will want to buy;new business deals/plans) to save itself, the company will die as soon as the cash stroage emptys...

RE: Aquisition?
robrecht @ 4/16/2003 2:16:56 PM #
One possibly failing company buys another failing company in order increase the momentum? Seriously, Palm might benefit by making their Tungsten W more voice-centric. SONY might more readily profit from Handspring's experience with convergence devices if they moved into this arena but they might have to first back out of their failing cooperation with Ericsson.

Thanks, Robrecht
RE: Aquisition?
popko @ 4/16/2003 2:22:27 PM #
That's different from HS's currenty position.

If memory serves, the reason Sony CEO gave on the issue of why staying with Ericsson was that they didn't want to pay the heavy licencing feed. Which is also why Sony wanted to buy PalmSource if the option presented itself.

Yeah, I'm holding on to my HS stock as well. In 50 years I can tell my grand son "here's a lesson on how to invest..." ;p

It's about time!!!

JFM3 @ 4/16/2003 2:40:12 PM #
Where has HS been? I loved the Treo when it first came out but just wanted a little bit more. Then they just disappeared for awhile. This new model coming out this fall better be good with OS5. At least it's good to hear that HS is still alive.
RE: It's about time!!!
OrionNE @ 4/16/2003 5:11:14 PM #
I got burned on Springboard investments (As did many people)

Not sorry to see them in a bit of hurt. Heck they left me high and dry with Springboards.

I think the thumb board was a bad choice (My opinion) for Treo Standard. If the Treo300 had a sd slot and graffiti I would have bought it.

RE: It's about time!!!
Shotokan @ 4/16/2003 6:39:39 PM #
I may be in the minority on this but I need the springboards. I would rather have them integrated onto the device of course, but I think a Symbol device is a little big to carry around everywhere. I currently have a ThinWrist modem, symbol scanner, 16MB Flash Module and Eyemodule camera springboards for my visor prism. I could do without the camera, but my kids really think that it is cool. There are no vendors currently selling a SDIO modem or scanner that I can find. Wireless is nice, but still too expensive and the landline is fine for doing our work.

Just my $.02


"a significant new product due this fall."

jonecool @ 4/16/2003 5:27:55 PM #
Let's see, how about a device with:

* SD/MMC card for expansion (with SDIO)
* MP3 Player
* Voice dialing/answer capability
* Voice Recorder
* High-speed internet access
* 16MB+ of RAM
* PalmOS 4.1 (or 5 if we're lucky)
* GPS (Location based for e911)

Ah heck... I'll just buy a Kyocera 7135 :)

Seriously, I don't know what Donna means by a "a significant new product due this fall" but I doubt their new product could be much more than the features above (likely much less). All of the features above are shipping in a product today. Coming from a company that invented the expandable handheld (Visor), you would think Handspring would apply that success in the initial TREO release. The lack of expandability of the TREO is what kept me from considering it.

I've placed my vote in my purchase of the new Kyocera 7135. It's everything I wish my wife's TREO 270 was. Sure, it's not for everybody but it's already "a significant new product" that's available today.

Just my .02


Meaningless Speculation
robman @ 4/16/2003 6:58:06 PM #
Maybe Handspring is going to release a razor thin Bluetooth handheld (with NO other wireless support) and a faceless Bluetooth-to-GSM bridge. Then you can keep the bridge in your pocket or purse out of the way but use the handspring as a phone; without the huge battery or added radio electronics.

It seems like Handspring got screwed on the Springboard (and consequently screwed consumers) because they wouldn't adhere to standards. Maybe their signficant new product will involve them committing to Bluetooth or SDIO, something most everyone else already did a long time ago.

With a heavy heart,
Robby

RE: More Importantly
jscherber @ 4/16/2003 7:43:57 PM #
I believe I read somewhere that Handspring has also announced they are leaving the organizer market completely to work with cell phone providers on Palm Enabled Smart Phones like the Treo. Bye bye Visor.

Best, James Scherber

RE:
RoelvdV @ 4/17/2003 10:38:16 AM #
According to this article: http://www.forbes.com/home_europe/newswire/2003/04/15/rtr941231.html it will run on OS 5.

And both a GSM and CDMA version will be developed.

Greetings, Roel.

RE:
hoodoo @ 4/17/2003 10:52:21 AM #
The article says TREO sales have so far lagged Handspring's expectations.

HMMM...I think the products themselves are fine, but the wireless carriers are charging an arm and a leg and some other body parts for conectivity. i,e, voice service, data service, e-mail, sms service, with only minimal discounts on the hardware. It costs upwards of $100+ per month here in Canada to have a reasonable connectivity package. Count me out for now.

RE:
Marshall Flinkman @ 4/18/2003 10:45:46 PM #
Any word on where the new device will operate? (i.e. GSM world phone?)

Donna just killed sales....

markpmc @ 4/17/2003 12:47:41 PM #
Much like Palm when they "preannounced the m500 series and killed purchases of the soon to be out dated Vx models.

Why would anyone buy a "current" Treo knowing that "a significant new product due this fall" ?

Remember who buys these things... Not your average consumer who doesn't keep up with product updates.

HS just died....

markpmc

RE: Donna just killed sales....
drixter @ 4/18/2003 12:16:03 PM #
"Why would anyone buy a "current" Treo knowing that "a significant new product due this fall" ?"
-------------------

Actually, it made me MORE likely to buy a current treo. I had been sorely tempted by the combination Amazon/Sprint offers, which drop the price of a treo to $150 with new activation (expires Apr 22, so see Amazon if interested). But I decided not to bite 'cuz I figured a hot new treo might be right around the corner. Now I know they're promising it for fall in Europe, well... fall probably means winter, and at least three months later til it's available in the U.S. So that means quite possibly a year from now before I could get one in my hands. That has definitely revived my interest in the $150 offer for the current model. I figure I sign up now, and by the time my contract runs out in a year, the new model will be available. Perfect timing.

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