Palm cuts prices

A month after introducing new handhelds with expansion slots, Palm Inc. told analysts Wednesday that it would cut prices on some older models.

Palm reduced the price of its entry-level m100 model to US$129 from $149. The colour Palm IIIc handheld and the black-and-white, sleeker form factor Palm Vx model will each now be $299, cutting $50 from the Vx price and $30 from the IIIc.

“Palm is indeed trying to move inventory aggressively and wisely,” Palm said through a spokeswoman from the company’s public relations firm. “In addition to the price drop, we have initiated new in-store promotions and new point-of-sale displays in the retail environment.”

The company also said on Wednesday that it had extended its licensing agreement with Handspring Inc. for the Palm operating system through April 2009. The licensing deal is nonexclusive; Handspring may choose to use another OS in its product.

During the third quarter ending in February, Palm licensees paid $8.6 million to the personal digital assistant (PDA) maker. Palm wants to make more money from licenses eventually, but in the third quarter most of its revenue – $451 million in sales – came from Palm hardware.

Palm sales dropped sharply in March of 2000, the company said in its March earnings conference at the end of the month, noting that it expected weaker sales this year for the same period.

Palm reported $470.8 million in revenue for the third quarter in March, with pro forma profit of $9.3 million – $0.02 cents per share – beating analyst estimates by a penny. But facing a general economic slowdown and unable to see when glory days will return for the technology market, the company said it would eliminate 250 jobs and postpone construction on new corporate headquarters in San Jose, California, to cut costs.

Palm, in Santa Clara, Calif., can be reached at