Tapwave Launches Wireless Gaming Handheld

Mountain View, Calif.— Tapwave, a new company launched by former Palm executives, unveiled a wireless gaming handheld with music and organizer capability, code-named Helix.

The product will run the Palm 5.2 operating system and use a Motorola ARM and ATI processor. It will offer wireless capability and Bluetooth for gaming with up to eight players simultaneously. Screen resolution is expected to be 480 by 320, with a 3.8-inch transflective, backlit 16-bit color display.

Expected to ship by the end of the year, the unit will play full-motion video, MP3 audio and will include a photo viewer and all PDA functions available on the Palm OS. The Helix, which will be renamed in the future, is also expected to accept SD cards and SD I/O peripherals such as digital cameras, WiFi cards and FM radio cards. Other product details are being withheld until after E3 next week, according to a spokesman.

Tapwave said it has agreements with Midway, Infogrames and Activision to license their premier titles. A spokeswoman said pricing on the unit would be "in line with other gaming devices such as the Xbox."

The company was founded in May 2001 by former Palm worldwide product development VP Peng Lim and product management VP Byron Connell.

Analysts note that the jury is still out on the high-end, wireless handheld gaming segment.

Ken Dulaney, mobile computing VP for Gartner's Dataquest, San Jose, Calif., said, "The market is unproven and if it is successful, Microsoft, Sony and all those other gaming companies won't stand by. You can bet Sony, with their PlayStation franchise, will jump in and beat the hell out of this company. I'm not saying there isn't a market, but they are going after some pretty big guys."

Nokia plans to launch a multimedia gaming device with phone capability called the N-Gage in the third quarter at an estimated price of $499. TTPCom is also licensing a wireless gaming platform code named b'ngo.

Alex Slawsby, analyst for IDC, Framingham, Mass., said, "It will be a while before anyone can determine the impact on the market of this device. The major devices like the N-Gage and b'ngo haven't shipped yet. Nokia is saying they will sell 10 million worldwide, but expectations are that this is high. These wireless devices require a wireless card and a subscription fee, so it's not a stocking stuffer where you just add some batteries."

Slawsby agreed that Tapwave could face stiff competition. "If the opportunity is hot and a killer design is found, where people are saying, 'forget the Game Boy, I'm ready for wireless,' they will definitely pounce," he said, referring to key players such as Microsoft and Sony.

According to a Reuters report, research firms say total video game hardware and software sales reached $10.4 billion in 2002 in the United States, with global hardware and software sales in 2003 expected to top $30 billion.

Tapwave claims that no one has yet tapped into the sophisticated gaming market.