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February 13, 2006

HP splits out iPAQ, unveils WiFi/cellular model

Hewlett-Packard has separated its iPAQ business out from the Personal Systems Group (PSG), forming what is to be called the Handheld Division, leaving laptops and PCs in PSG. The company also launched its first combined WiFi and cellular iPAQ.

By CBR Staff Writer

Hewlett-Packard has launched a combined WiFi and cellular iPAQ and reorganized its iPAQ division.

The decision to split the iPAQ out into a separate, dedicated business unit was leaked by the Wall Street Journal and, though taken by surprise, HP confirmed the information, albeit without having a statement ready.

The rationale is that the area it will operate in is essentially different, and quite a lot more dynamic, that what’s happening in laptops and PCs, while the route to market will also be somewhat different from the traditional HP channel, as at least part of its sales will now come through mobile carriers.

Clearly, if HP is to make a serious impact in the mobile market, the thrust of future development for the iPAQ will have to be in connected rather than unconnected devices and, indeed, the unconnected PDA market has been flat for the last couple of years while smart phones have grown continually.

To date the company has had cellular capabilities only on the 6300 and 6500 Series, one with and one without a camera, and a WiFi device in the 4700. Now it has expanded the offering with the 6900 Series, to which it appends the epithet Mobile Messenger, highlighting the fact that the device, which runs Windows Mobile 5.0, can offer push email as part of the Messaging and Security Feature Pack (MSFP) released by Microsoft last year.

The 6900 has GPRS and EDGE on the cellular side and WiFi and Bluetooth in wireless. The phone is designed to sell in both Europe and the US, which means it features frequency bands for both geographies. It also comes with the TomTom navigation software from the eponymous Dutch developer.

This is the most muscular offering yet from HP’s iPAQ business unit, with the app du jour in push email as well as multiple connectivity options. The challenge now will be to drive the operator alliances it needs to get these devices into the market at subsidized prices, and the formation of the separate Handheld Division is recognition of the need for focused effort to achieve that goal.

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