HP Unveils Handheld with Upgraded Chip, Software

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New Jornada 565

LA JOLLA, Calif. (Reuters) – Hewlett-Packard Co. (NYSE:HWPnews) unveiled a handheld ‘computer on Thursday featuring a combination of Intel components and Microsoft software that the company says makes the pocket-sized device nearly comparable to bulkier laptops.

The Jornada 560 series is the first HP handheld to feature a low-power processor from Intel Corp. (Nasdaq:INTCnews) and the first in the market to include Microsoft’s new handheld operating system, expected to become the standard configuration for the next generation of handheld PCs as those devices increasingly compete for business users.

The new Jornada line includes Intel Corp.’s low-power StrongARM processor and the companies StrataFlash memory. HP and Intel also said they will work together to bring voice and wireless communication applications to future handheld devices.

The tie-up comes three days after HP said it would acquire Compaq Computer Corp. (NYSE:CPQnews) in a deal that would make the combined company the largest personal computer maker. Both companies have been strong supporters of Intel, basing their product lines on chips from the No. 1 chipmaker.

HP said it has begun shipping two versions of the color Jornada, which were the first to use the new Pocket PC 2002 Premium Edition software from Microsoft Corp. (Nasdaq:MSFTnews), the No. 1 software company.

The Jornada 565 and 568, previewed at the DemoMobile conference here and set for an Oct. 4 retail launch, will carry a suggested retail price of $599 and $649, respectively, less a $50 rebate good through the end of 2001.

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That rebate could be extended into next year depending on demand, said Bob Engel, appliances category manager for Hewlett-Packard. HP expects that the new Jornada will have at least a one-month lead on competing handhelds in offering the new Microsoft operating system, he said.

Analysts have speculated that the new Hewlett-Packard would drop one of its two major lines of handheld computers, either its own Jornada or Compaq’s iPAQ.

While the iPAQ has a larger market share than the Jornada, an HP spokeswoman defended the success of its offering and the company said it would continue to market its earlier 540 model as a cheaper alternative to the new machines.

The new 560 series will work with the keyboards and other peripheral devices that worked with the earlier Jornada models, Engel said.

The new Jornadas are the first devices to use Intel’s StrataFlash memory, which Marc Casey, director of marketing at the chipmaker, said means the handheld can pack “two times the bits in one time the space.”

HP is also the first brand-name manufacturer to commit to using Intel’s Personal Client Architecture, a framework for incorporating a separate chipset for communications in future handheld devices, Casey said.

Until now, Compaq had not producing devices incorporating that Intel design, he said.

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