Handspring posts loss, scraps move plans

Loses $91.6 million for fiscal 2002 amid struggles to transform itself to a phone company.

PalmOS-based handheld device manufacturer Handspring Inc. on Wednesday posted a financial fourth quarter net loss of $15.4 million, or 11 cents a share, compared with a net loss of $67.2 million, or 60 cents a share, a year ago.

Excluding expenses, the loss was $11.7 million, or 8 cents a share.

Revenues for the fourth quarter, which ended June 29, were $49 million, compared with $61 million last year.

For fiscal 2002, net loss was $91.6 million, compared to $126 million in fiscal 2001. Revenue was $240.7 million, compared with $370.9 million last year.

The company had been planning to open offices in Sunnyvale, Calif., but has decided to scrap these plans, and this will have an initial negative financial effect.

"Given the slowdown in this growth we no longer believe it makes sense to occupy these buildings," said CEO Donna Dubinsky, who said the company wants to sub-lease the buildings if possible. In any case, "We expect to take a significant one-time charge in either this quarter or the next quarter."

Dubinsky also announced that Handspring co-founder Jeff Hawkins, who always has been fascinated with the human brain, has started an organization called the Redwood Neuroscience Institute and will be dividing his time between the institute and Handspring, where he will continue to work as chief product officer and chairman of the board.

Handspring is searching for a new chief financial officer.

In the past year, Handspring has been working to transform itself from an organizer company, with its flagship Visor line of devices, to a phone company, with its new line of Treo devices. The Treo has received critical, carrier and retail acclaim, but the device hasnt been as popular with consumers.

The company is hoping to boost sales with upcoming Treo devices.

A software upgrade for the Treo 180 and 270 devices, enabling those devices to run on the next generation general packet radio service (GPRS) network, is due by the end of this quarter.

An additional device, the Treo 300, is "nearing completion," according to Dubinsky, and will be available both on the Handspring Web site and through Sprint Corp.s Sprint PCS division. Sprint is expected to launch a nationwide high speed wireless voice and data network in August.

Both the Visor and the Treo run on Palmsource Inc.s Palm operating system. Palmsource recently released version 5 of its OS, which will run on ARM-based processors.

"Were definitely excited about it and taking a pretty close look at it," Dubinsky said, but she declined to say whether Handspring would release devices based on OS5.