Updated from 2:45 p.m. ET
got a boost Tuesday after announcing a plan to resell its
handheld devices, enabling the company to attempt to gain a much-needed foothold in the enterprise market.
Its stock closed up $3.38, or 26%, at $16.19. But in after-hours trading, the stock was hammered after competitor
said it's seeing weak demand. On
, Handspring was trading at $12.75 recently.
The second-largest maker of handheld devices behind Palm struck a deal with wholesaler
, which will offer Handspring products to resellers and value-added resellers. The resellers, in turn, will market and sell those products to enterprises, or large corporations.
This deal "stakes out space for them
Handspring in the enterprise market," says Thomas Carpenter, an analyst at regional brokerage
. (He rates Handspring a hold, and his firm has done no underwriting for the company.)
It's important that Handspring target that market, especially because
Research in Motion
, maker of the popular
pager, is already the clear leader there. Also Palm is making increasingly greater inroads, with its latest move an
agreement earlier this month to buy
However, RIM and Palm lately have been punished for their presence in the enterprise market, with analysts
concerned that the economic slowdown in the U.S. and a pullback in spending by corporations will hurt their sales.
Nevertheless, when Handspring reported its fiscal second-quarter numbers in January, it hinted at a strategy to target large corporations. A first step came the month before, when the company bought
, which provides enhanced Internet access for handheld computers, a useful feature for business customers.