palmOne announced today it has initiated a second phase of the integration process that began when the company acquired Handspring, Inc. on Oct. 29, 2003. The company is rebalancing the investment levels in its handheld computer and smartphone product families, and reducing its work force by about 100 people, or 12 percent.

"We intend to maintain our lead in the handheld-computer category with new, innovative solutions while we shift more investment toward the higher-growth smartphone category," said Todd Bradley, palmOne president and chief executive officer. "The Handspring acquisition continues to deliver synergies, and tough but strategic decisions coupled with operational discipline enable us to reduce overall spending. We are committed to delivering growth and profitability, and these actions will move us closer to those goals."

After the work force reduction, palmOne will have approximately 740 employees.

Growth in the PDA market has been slow in recent years while the smartphone market begins to take off. This is likely a very smart move on palmOne's part.