Palm Slaps Back at Handspring in Handheld Price War

Head for cover, the handheld price wars are heating up.

Last week Handspring (HAND Quote) lobbed a grenade when it cut $50 off the price of its Visor Deluxe product (now $199) and slapped a $50 rebate on its Visor Platinum.

Palm (PALM Quote) answered back with a rocket launcher over the weekend, blowing the price of its Palm VII handheld to bits. The Palm VII can wirelessly connect to the Internet through the Palm.net Internet service and now costs a Visor Deluxe-matching $199, down from $399. Additionally, consumers can take advantage of a $100 Palm rebate to get that Palm VII for a shell-shocking $99.

Lehman Brothers analyst Joe To attributed the high-end move to an evacuation of the Palm VII product ahead of a fall release of a newer wireless-Internet surfing Palm product. To labeled the cuts "much more severe than [he] had expected" and responded to the new Palm VII prices by dropping his price target on Palm to $11 from $25 and taking Handspring's targets down to $18 from $28 in a Monday research note. His firm has not done recent investment banking for Palm. ...