New product turns Palm around

The new model has a bigger memory and more colours

Shares in Palm soared almost 12% in a day, after it unveiled a new improved handheld computer.

The latest model boasts four times as much memory than the m100 model released last year.

It will let Palm users with compatible mobile phones send e-mails, search the internet and chat online.

The news boosted investor confidence in the US firm, and the share price rose almost 12% after having slumped from over $66 in November to $17.3 at the beginning of the week.

The new model will be priced $50 higher than its predecessor, at about $199 (£136) and will target a more upmarket niche than some of its cheaper competitors.

The company's hope is that the product will cash in on the growing convergence between mobile telephony and computing.

Multi-coloured attraction

Other customer-enticing features will include a variety of multi-coloured plastic covers, and a cradle rather than a cable to download information from traditional personal computers.

The company says that demand for its products in both US and international markets is expected to remain "strong" as consumers' preference has shifted from home computers to handheld devices.

But the fate of UK handheld computer firm Psion has been very different.

Shattered confidence

Psion's share price took a 20% hit last week, after announcing poor fourth quarter results, and abandoning plans to launch the world's first mobile phone-cum-organiser.

Palm's share price rose 11.91% during the day, closing at $19.375 and hitting a high of $20 during the day's trading.

The firm is listed on he high technology Nasdaq index, which has been heavily sold down during the year, after investor confidence in the returns on technology shares was shattered.

Palm was spun off from parent company 3Com in 1999.