Palm's New Push Is Toward the High End

The "W" will be the company's first wireless device that operates on GSM/GPRS networks, but will continue to be built with older Motorola-developed processors and the current generation's operating system, OS 4.1. In the U.S., wireless carriers including T-Mobile, Cingular and AT&T Wireless(AWE) operate GSM, or global system for mobile communications, networks. The device is geared mainly as a wireless data device, and does not include a built-in earpiece. To make a phone call, users will need to plug in an earphone.

"[We're] not intending to replace mobile phones," Christopher said. Without a subsidy from wireless carriers, the device will sell for around $549.

Tungsten W's success will rely on a close relationship with wireless carriers, which Palm has yet to divulge at this point. Handspring(HAND), which also sells phone/organizer hybrids, learned the importance of such relationships the hard way, after sales of its Treo Communicators lagged. Handspring has told investors that its closer relationship with Sprint PCS(PCS) has spurred sales.

A Palm spokesman said carrier relationships will be announced on Monday. The Tungsten W will most likely be available through individual carriers by early next year. The Tungsten T will be available beginning Monday, Oct. 28.

Shares of Palm rose 58 cents, or 5.08%, to $11.78 on Friday. Meanwhile, Handspring shares gained 3 cents, or 4.62%, to 68 cents. Texas Instruments shares jumped 91 cents, or 6.24%, to $15.50.

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