Handspring’s Stock Gets a Bounce

Handspring Inc., whose Visor electronic organizer has quickly gained popularity on the retail market, plans next week to begin selling an add-on that will turn the hand-held computer into a wireless phone and Internet device.

Making good on the promise Wall Street has attributed to the Visor’s Springboard expansion slot, the Mountain View, Calif.-based company will be the first in a hotly contested U.S. market to marry a hand-held computer with a wireless phone with its VisorPhone module.

And, in a bid to meet the growing market for hand-held products with color screens, Handspring also plans to release the Visor Prism model Oct. 16. The 8-megabyte personal digital assistant offers 16-bit color and a faster 30-megahertz processor. It will run on Palm OS 3.5 and rechargeable lithium ion batteries. It will cost $449. At the same time, Handspring plans to unveil a new 8mb monochrome Visor in silver casing, Platinum, which has the faster processor and upgraded OS. It will cost $299.

Handspring’s stock soared $5.56, or 12%, to $51.56 on Wednesday in Nasdaq trading on news of the upcoming devices. Wall Street is betting Handspring will be a key player in the nascent wireless devices market, and Wednesday’s run-up gives the company a market value of $6.5 billion.

Handspring’s Visor, which has a faceplate that comes in five colors, already is a hit with hundreds of thousands of consumers. The product has grabbed an estimated 25% of the retail markets in which it competes, although that came in part because it did not suffer the flash memory shortages that hampered sales of its competitors.

While similar in form and function to some products from Palm Inc., whose operating system Handspring licenses, Visor has proven an attractive alternative because of the Springboard slot.

To date, such expansion modules have been scarce, but many developers are rushing to bring products to market for the holiday shopping season. Redwood City, Calif.-based Good Technology, for instance, next week will begin selling its SoundsGood module that turns the Visor into an MP3 player for the fast-growing downloadable music market.

The VisorPhone module will retail for $299 if buying with accompanying rate plans from telecommunications company partners Pacific Bell Wireless, Bell South, Powertel and VoiceStream. Consumers who choose to buy only the VisorPhone module will pay $499.

Using the microphone built into both the $149 and $299 Visor models, the GSM phone cartridge uses software that provides caller identification, three-way calling, voice mail, speed dial and missed call numbers and that integrates with the address book feature on the PDA. It runs on lithium ion batteries and comes with a charger and an earphone.

Market research firm Dataquest expects global sales of computer hand-helds to quadruple in the next three years to 32 million units worth $7.2 billion.

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Times staff writer Michelle Maltais contributed to this report.