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HQ W968223

January 12, 2007

CLA-2 RR:CTF:TCM W968223 HkP


TARIFF NO.: 8525.20.9070/
8517.12.00 (2007)

Port Director
Port of Anchorage
U.S. Customs and Border Protection
605 W. 4th Avenue, Suite 203
Anchorage, AK 99501

RE: Request for Internal Advice no. 06-009; HP iPAQ mobile messenger

Dear Port Director:

This ruling is in response to a request for Internal Advice initiated by the Hewlett-Packard Company (“HP”). At issue is the proper classification of the HP iPAQ 6500 Series Mobile Messenger (“iPAQ”), a global communications device that integrates several wireless technologies to combine high-speed voice and data communications in a handheld PDA (personal digital assistant) device. Literature on the HP iPAQ has been submitted with this request.

In reaching our decision we have also considered additional information provided by HP, submitted by email dated September 22, October 6, and 23, 2006. This ruling concerns specific facts and applies only to the devices identified in this ruling.


The HP mobile messenger series under consideration includes models hw6510, hw6510b, hw6515, and hw6515b. According to the product literature, each device is approximately 4.65 inches high x 2.8 inches wide x 0.8 inches deep, weighs 165g (5.8 ounces) and features: an integrated antenna; Intel PXA272 processor (312MHz); 128 MB total memory (64 MB SDRAM and 64 MB ROM), with up to 72 MB user available memory that includes 8MB iPAQ File Store; integrated Secure Digital Input Output (SDIO) slot and Mini-SD slot (memory only); integrated microphone, receiver, speaker and one 2.5 mm stereo headphone jack, MP3 stereo (through headphone jack); and a three-inch diagonal, transflective thin film transistor (TFT) 64K color display touch screen (screen resolution 240x240) with LED backlight. The iPAQ also features integrated IrDA (SIR) interface (infrared protocol for the exchange of data between two devices), Serial RS232 interface supported via HP standard 22 pin cable interface (cable purchased separately), and USB 1.1 Client interface, supported via HP standard 22-pin cradle interface. A built-in QWERTY keyboard is used to perform multiple messaging tasks such as composing/sending email, notes, text, instant, picture and video messages, and to access the Internet and make phone calls.

The iPAQ uses Microsoft® Windows Mobile™ 2003 Second Edition software - Phone Edition operating system, which includes versions of Microsoft® Outlook, Word, Excel and Internet Explorer for Pocket PCs (Pocket PC is the generic name for Windows Mobile PDAs (personal digital assistants)). They also feature Global System for Mobile Communication (GSM) (digital cellular phone), General Packet Radio Service (GPRS) and Enhanced Data rates for Global Evolution (EDGE) (wireless connectivity), Bluetooth (short-range wireless data transfer between compatible devices), and Global Positioning System (GPS) (navigation) technology. However, GPS Navigation software is not included with iPAQ models imported into the U.S. The EDGE-capable network provides high-speed data connectivity up to 100-130 kilobits per second. The iPAQ is designed to automatically switch to a GPRS network when outside the range of an EDGE network, thereby offering a seamless mobile experience. GPRS wireless connectivity requires a data service contract purchased from a wireless airtime provider, in this instance, Cingular. However, iPAQ QuickSpecs state that GPRS may not be available in all networks, and that GPRS data transmission speeds may vary based upon network capabilities and other conditions. The GSM technology enables high quality mobile voice and data services such as Short Messaging Service (SMS) and Multimedia Messaging Service (MMS). The iPAQ GSM phone has worldwide roaming capability, operates on four different bandwidths (quad-band) - 850, 900, 1800, 1900MHz - and performs all the functions of a regular cellular telephone. Phone functionality requires a voice service contract purchased from Cingular. By email dated October 6, 2006, the importer informed U.S. Customs and Border Protection (“CBP”) that the GSM module is integrated into the iPAQ during manufacture and is imported into the United States as part of the finished iPAQ. The GSM module has a dedicated radio antenna that is also part of the imported device.

In response to queries made by CBP regarding the nature of the technologies integrated into the iPAQ, the importer stated in an email dated October 23, 2006, that: (1) The GSM module is the client chipset that communicates with local phone towers. It allows only for use as a cellular phone (voice or data transfer) on the band dictated by the regional carrier/ infrastructure. (2) GPRS and EDGE are 2.5G technologies. Having GPRS/EDGE allows the client device to communicate using whatever existing infrastructure (cell towers) exists in the region. (3) Neither GSM, GPRS, nor EDGE functions independently; each depends on the host processor for command and control.

CBP conducted further research on these technologies and discovered:

GSM is a cellular network, which means that mobile phones connect to it by searching for cells in the immediate vicinity. GSM networks operate in four different frequency ranges. Time division multiplexing (TDM) is used to allow eight speech channels per radio frequency. TDM technology transmits multiple signals simultaneously over a single transmission path. Each lower-speed signal is time sliced into one high-speed transmission. TDM enabled the telephone companies to migrate from analog to digital on all their long distance trunks. The technology is used in channel banks, which convert 24 analog voice conversations into one digital T1 line. There are eight radio timeslots grouped into what is called a TDMA (Time Division Multiple Access) frame. TDMA is a satellite and cellular phone technology that interleaves multiple digital signals onto a single high-speed channel. For cellular, TDMA triples the capacity of the original analog method. It divides each channel into three subchannels providing service to three users instead of one. See generally www.answers. com, “GSM”.

GPRS is a mobile data service available to users of GSM mobile phones. It is often described as “2.5G”, that is, a technology between the second (2G) and third (3G) generations of mobile telephony. It provides moderate speed data transfer by using unused TDMA channels in the GSM network.

See generally www.answers.com, “GPRS”.

EGDE acts as a bolt-on enhancement to 2G and 2.5G GPRS networks. It provides enhanced GPRS, which can be used for any packet switched application A communication system wherein the information is transmitted in packets of a set size. These packets have address headers and find their way to their destination by the most efficient route through the network. http://www.gsmworld.com/technology/glossart.shtml. such as an Internet connection. See generally www.answers.com, “EDGE”.

By email dated September 22, 2006, the importer informed CBP that the iPAQ is not imported with a SIM (Subscriber Identity Module) card and that the device is not capable of transmitting data without a SIM card. The Getting Started guide for the iPAQ states:

IMPORTANT: You must subscribe to a mobile phone service provider before you can use the HP iPAQ to place a phone call. The service provider will give you a SIM (Subscriber Identity Module) card to be used for phone and data functions on your HP iPAQ. The SIM card must be activated by your mobile phone service provider before it can be used. At 2.

The guide goes on to explain, “[t]he SIM card also contains the memory to store speed dial numbers and text or SMS messages that you receive.”

Models hw6515a and hw6515b of the iPAQ have built-in HP Photosmart 1.2 MP digital cameras that allow users to take a picture and share it by sending it wirelessly from the iPAQ to any other mobile device. Files can be transferred to a printer from the iPAQ via SD or Mini-SD memory card or USB connection.

All HP iPAQs are imported boxed with a lithium-Ion 1250 mAh removable/rechargeable battery, removable flip cover, stereo earbud style headset with 2.5 mm jack, AC adapter, charge adapter USB desktop synchronization cradle, stylus, belt case, Getting Started guide, How do I ? guide, and the HP iPAQ Pocket PC Companion CD.

It is the inquirer’s position that the physical characteristics of the iPAQ indicate that its principal function is as an automatic data processing (“ADP”) machine of heading 8471, Harmonized Tariff Schedule of the United States (“HTSUS”). It is the port’s view that the iPAQ is properly classified as a transmission apparatus of heading 8525, HTSUS.


Whether iPAQs are properly classified in heading 8471, HTSUS, as ADP machines, or in heading 8525, HTSUS, as transmission apparatus for radiotelephony, whether or not incorporating reception apparatus.


Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order.

The HTSUS provisions under consideration are as follows:

8471 Automatic data processing machines and units thereof; : 8471.30.0000 Portable digital automatic data processing machines, weighing not more than 10 kg, consisting of at least a central processing unit, a keyboard and a display ..

8525 Transmission apparatus for radiotelephony, radiotelegraphy, radiobroadcasting or television, whether or not incorporating reception apparatus, or sound recording or reproducing apparatus; : 8525.20 Transmission apparatus incorporating reception apparatus: 8525.20.90 Other ..
Other radio telephones designed for the Public Cellular Radiotelecommunication Service: 8525.20.9070 Other ..

Legal Note 5(A) to Chapter 84
The 2007 version of the HTSUS reflects stylistic but not substantial changes made to this note. The most notable change is the deletion of the word “digital” from the definition of ADP machine. See www.usitc.gov for the complete text of the proposed 2007 HTSUS. provides, in relevant part:

For the purposes of heading 8471, the expression “automatic data processing machines” means:

Digital machines, capable of (1) storing the processing program or programs and at least the data immediately necessary for the execution of the program; (2) being freely programmed in accordance with the requirements of the user; (3) performing arithmetical computations specified by the user; and (4) executing without human intervention, a processing program which requires them to modify their execution, by logical decision during the processing run[.]

Chapters 84 and 85 are found in Section XVI of the HTSUS. Legal Note 3 to Section XVI, HTSUS, provides:

Unless the context otherwise requires, composite machines consisting of two or more machine fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function.

Inquirer argues that the iPAQ is properly classified in subheading 8471.30, HTSUS, as a portable ADP machine because it is a composite machine that functions principally as a handheld computing device.

We agree with Inquirer that the iPAQ is a composite machine within the meaning of Legal Note 3 to Section XVI, HTSUS. The iPAQ is comprised of a variety of distinct devices including a cellular telephone, a digital camera, a handheld electronic computing device, and a GPS navigation system, each of which, if imported separately, would be classified under different HTSUS provisions. Handheld electronic computing devices, whether or not incorporating two-way wireless functionality which allows integrated wireless data access to the Internet without the use of accessories, are classified under heading 8471 (subheading 8471.30), HTSUS, as ADP machines. See Headquarters Ruling Letter (‘HQ”) 964880, dated December 21, 2001, for an analysis of this issue. Cellular telephones are classified as transmission apparatus for radiotelephony under heading 8525 (subheading 8525.20.90), HTSUS. Digital cameras are also classified under heading 8525 (subheading 8525.40), HTSUS. However, when digital cameras are incorporated into cellular telephones to form “camera phones” CBP has consistently classified such devices as cellular telephones because the cameras perform a secondary function. See New York Ruling Letter (“NY”) K84321, dated March 23, 2004. GPS systems are classified as radio navigation apparatus of subheading 8526.91, HTSUS. See HQ 955510, dated September 16, 1994, and NY I80141, dated April 12, 2002.

We also agree that the camera and GPS functions are subordinate to other functions of the iPAQ. We consider the incorporation of cameras into iPAQs to be analogous to the incorporation of cameras into cellular phones. In addition, although the GPS system is an added feature that enhances the functionality of iPAQs, GPS Navigation software is not included with the iPAQ models imported into the U.S. Accordingly, we find that the digital camera and GPS functions of the iPAQ are subordinate to its other functions and do not determine classification. Whether the iPAQ’s principal function is as an ADP machine of heading 8471, HTSUS, or transmission apparatus of heading 8525, HTSUS, constitutes the remainder of this ruling.

Heading 8471 provides for ADP machines, as defined by note 5(A) to Chapter 84, HTSUS. In Headquarters Ruling Letter (“HQ”) 964880, dated December 21, 2001, CBP considered the requirements of Note 5(A) in relation to a handheld computing device - the Palm VII. Applying the analysis of Legal Note 5(A) found in HQ 964880 to the device at issue, we find that the iPAQ, like the Palm VII, satisfies all the terms of the note. The iPAQ is: (a) capable of storing the processing program or programs and at least the data immediately necessary for the execution of programs in its RAM and ROM by (1) incorporating an operating system that controls the running of other programs, and (2) containing sufficient memory to store and execute standard applications such as the date book, memo pad and calculator, as well as other programs which may be added or created by the user; (b) Freely programmable. The iPAQ uses the Windows Mobile operating system, which, according to the Microsoft website is “an open platform that supports needs beyond mobile messaging. It is based on Microsoft.NET, giving developers freedom to innovate. Over 18,000 Windows Mobile applications are available from third-party developers”; (c) Capable of performing arithmetical computations specified by the user. Each iPAQ contains an Intel PXA272 processor that can perform complex arithmetic computations. For example, the user may instruct the device to add simple integers together or compute more complex arithmetical instructions; (d) Capable of executing, without human intervention, a processing program which requires it to modify its execution, by logical decision during the processing run. Specifically, it is possible to write a program using the aforementioned applications that contain logic instructions. Therefore, we find that the iPAQ is, prima facie, classifiable under heading 8471, HTSUS, as an ADP machine.

Heading 8525 provides for, inter alia, transmission apparatus for radiotelephony, whether or not incorporating reception apparatus or sound recording or reproducing apparatus. The Computer Glossary, 6th ed. (Freedman, ed.) defines a transmitter as “a device that generates signals”. The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80. EN 85.25(A) explains, among other things, that transmission apparatus for radio-telephony or radio-telegraphy “is used for the transmission of signals (representing speech, messages or still pictures) by means of electro-magnetic waves which are transmitted through the ether without any line connection.” CBP has consistently found that equipment that aids in the transmission of an RF signal is “transmission apparatus” of heading 8525, HTSUS, whether or not the device being considered is an actual transmitter. See HQ 967964, dated October 18, 2006 (regarding splitters, couplers and multi-taps), HQ 950866, dated March 18, 1992, and HQ 958318, dated December 8, 1995. Accordingly, because the iPAQ incorporates radio-frequency transmission software such as GSM, GPRS, and EDGE, as well as transmission and reception hardware such as an antenna, a receiver, microphone, and speaker, we find that it is also, prima facie, classifiable under heading 8525, HTSUS, as transmission apparatus.

Inquirer contends that the principal function of the iPAQ is as an ADP machine, as indicated by its physical characteristics, the manner in which it is marketed and sold, and the cost of its computing components relative to the cost of its other components. We note that these are some of the factors usually considered under U.S. Additional Rule of Interpretation 1(a) when determining the “principal use” of the class or kind of good to which an imported good belongs. Generally, the courts have provided several factors, which are indicative but not conclusive, to apply when determining whether merchandise falls within a particular class or kind. They include: (1) general physical characteristics, (2) expectation of the ultimate purchaser, (3) channels of trade, environment of sale (accompanying accessories, manner of advertisement and display), (4) use in the same manner as merchandise which defines the class, (5) economic practicality of so using the import, and (6) recognition in the trade of this use. See Lennox Collections v. United States, 20 CIT 194, 196 (1996). See also United States v. Carborundum Co., 63 CCPA 98, 102, 536 F.2d 373, 377 (1976), cert denied, 429 U.S. 979 (1976); Kraft, Inc. v. United States, 16 CIT 483, 489 (1992); and G. Heileman Brewing Co. v. United States, 14 CIT 614, 620 (1990). Although indicative but not conclusive, CBP nonetheless finds that the guidance set forth by the courts to determine principal use may be helpful in establishing the principal function of a multi-function machine. CBP adopted a similar approach in HQ 966270, dated June 3, 2003.

Physical characteristics

Arguing against classification of the iPAQ as “transmission apparatus incorporating reception apparatus” under subheading 8525.20, HTSUS, Inquirer states:

Typically, a device used primarily as a cellular telephone will be designed so that the earpiece is attached directly above the mouthpiece for ease of use. In contrast, the iPAQ 6500 requires the user to speak and listen through a microphone located at the top product, or to listen through an earbud while speaking into the microphone. (See pages 6 and 10 of the Getting Started Guide). Neither configuration is optimal ergonomically for a telephone.

Inquirer also points out that the device incorporates a QWERTY keyboard instead of a number keypad, which he states, suggests that the iPAQ is designed primarily as an ADP machine rather than as a cellular telephone.

We consider the language of the heading under which cellular phones are classified. Heading 8525, HTSUS, provides for, among other things, transmission apparatus for radio-telephony, whether or not incorporating reception apparatus. The iPAQ meets the terms of this heading because, in its imported condition, it incorporates both transmission and reception apparatus and is used for radio-telephony. EN 85.25(A) explains:

(3) cellular telephones (also called “mobile phones”) receive and emit radio waves which are received and retransmitted by radio-telephone stations (base-stations) linked to each other. Each base station covers a geographical area (a cell). If the user moves from one cell to another while telephoning, the call is automatically transferred from one cell to another without interruption.

Based on the foregoing, we conclude that there is no ergonomic standard included in the tariff; also, there is no indication in the ENs that cellular telephones must be ergonomically correct. HP itself has stated that an iPAQ user can:

Communicate by voice with colleagues just as you would with a regular mobile phone, using the integrated speaker and microphone. You can also use a wired voice headset or a Bluetooth wireless headset to talk while using your hands elsewhere. The built-in speakerphone enables phone conversations within a small group of people.

HP iPAQ hw6500 Mobile Messenger Frequently Asked Questions and Answers.

Thus, there are three ways by which a user of an iPAQ can communicate by telephone over a cellular network despite the iPAQ’s lack of ergonomic design. Consequently, we find that the lack of ergonomic design is not a dispositive factor.

We are aware that, in its condition as imported, the iPAQ does not contain a SIM card - but does contain a GSM module and antenna, GPRS and EDGE software, a microphone, receiver, and speaker. As previously stated, without the SIM card the iPAQ cannot operate as transmission apparatus because it cannot connect to a cellular network. However, GRI 2(a) provides, in relevant part:

Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article.

The ENs to GRI 2(a) with reference to incomplete or unfinished articles explain, in relevant part:

The first part of Rule 2(a) extends the scope of any heading which refers to a particular article to cover not only the complete article but also that article incomplete or unfinished, provided that, as presented, it has the essential character of the complete or finished article.

Several cases covered by the Rule are cited in the General Explanatory Notes to Sections or Chapters (e.g., Section XVI, and Chapters 61, 62, 86, 87 and 90).

The General ENs to Section XVI, HTSUS, provide, in relevant part:

(See General Interpretative Rule 2(a))

Throughout the Section any reference to a machine or apparatus covers not only the complete machine, but also an incomplete machine (i.e., an assembly of parts for far advanced that it already has the main essential features of the complete machine). Thus a machine lacking only a flywheel, a bed plate, calendar tills, tool holders, etc., is classified in the same heading as the machine, and not in any separate heading provided for parts. Similarly a machine or apparatus normally incorporating an electric motor is classified in the same heading as the corresponding machine even if presented without that motor.

CBP considers a SIM card to be analogous to the electric motor mentioned in the General ENs. We have already found that the iPAQ meets the terms of heading 8525, HTSUS. Applying GRI 2(a), we now find that the cellular phone technology incorporated into the iPAQ, namely, the GSM module and antenna, and the GPRS and EDGE software, gives this device the essential character of transmission apparatus for radiotelephony of heading 8525, HTSUS.

Arguing for classification as an ADP machine, Inquirer contends that the physical characteristics of the iPAQ, specifically, its “additional functionality”, indicate that its principal function is as an ADP machine. Inquirer states:

The iPAQ 6500 runs on a Windows mobile operating system that is similar in functionality and feel to the Windows operating system of a personal computer. For example, the unit incorporates a “start” menu, navigation bar and command bar.

Specifically, the iPAQ includes pocket versions of applications typically used with a personal computer, such as Microsoft® Word, Excel, PowerPoint and Outlook. In addition we are told that the iPAQ can synchronize its calendar, tasks, contacts, e-mail, and document files with a personal computer. According to Inquirer, this indicates that the iPAQ is designed for use as a mobile version of a personal computer or laptop.

We refer to the fact that Microsoft has two Windows Mobile™ operating systems relevant to this discussion: Windows Mobile™ and Windows Mobile™ Phone Edition. The Windows Mobile website indicates that the Phone Edition is used with Pocket PC Phones. The website explains in its “FAQ” section the difference between a Pocket PC, a Pocket PC Phone, and a Smartphone:

With a Pocket PC, you’ll be able to use Word Mobile, Excel Mobile, and PowerPoint Mobile and browse the Internet if you have a device with Wi-Fi and are in a wireless hotspot. You can compose e-mail messages and send them by synchronizing with your desktop computer or wirelessly when you’re in a hotspot.

You can do everything with a Pocket PC Phone that you can do with a Pocket PC with the addition of wireless access to the Internet and cellular phone capabilities. If you have a Pocket PC Phone, you can access the Internet through your wireless connection – you won’t need to find a wireless hotspot. Internet access incurs data charges from your wireless provider.

You can add a wide variety of software titles to your Pocket PC and Pocket PC Phone.

A smartphone has phone capabilities and comes with a smaller set of applications. A smartphone is a good choice for business users who need to check e-mail, keep track of their calendars, and take voice notes, but who don’t need the added functionality of Word Mobile, Excel Mobile, and Power Point Mobile.


Generally, a “hotspot” is a specific geographical location in which an access point provides public wireless broadband network services to mobile visitors through a wireless local area network (WLAN). Information submitted to CBP by email on September 22, 2006, indicates that the iPAQ also incorporates a WLAN module with dedicated antenna. WLAN links two or more computers without using wires by using radio communication to achieve the same functionality as a wired LAN. WLAN utilizes spread-spectrum technology based on radio waves to enable communication between devices in a limited area, also known as the basic service set. This gives users the mobility to move around within a broad coverage area and still be connected to the network. (See generally www. wikipedia.com). CBP has previously classified WLAN apparatus in heading 8471, HTSUS. See, for example, NY R05147, dated November 24, 2006.

However, we note that the iPAQ uses the Phone Edition of the Windows Mobile™ operating system and find that use of this version of operating system software is a strong indicator of the iPAQ’s use for its transmission functions. The same computing functionality found in the iPAQ is also found in other Pocket PCs that do not have the iPAQ’s transmission capabilities. Consequently, we believe that when cellular phone functionality is included in a Pocket PC, such as the iPAQ, that functionality is an important physical characteristic.

Inquirer also informs us that:

The machine is composed of the same type of components that are part of desktop or laptop computer. For example, it comes with color display, navigation button and standard connectors for accepting peripherals. The device has an installed memory with expansion slots for additional memory. It can access the Internet, send and receive e-mail and communicate with remote devices.

Based on our research, we do not agree that the abovestated features are indicative only of an ADP machine. This office has observed that cellular phones may incorporate standard connectors for accepting peripherals and expansion slots for additional memory, as well as color displays and navigation buttons. See, for example, the Motorola Krzr K1m review, at http:// reviews.cnet.com.

The iPAQ clearly has the physical characteristics of both a handheld computer and transmission apparatus at the time of its importation. Therefore we do not consider this factor to be dispositive of the issue of classification.

Channels of Trade /Marketing

With regard to marketing, Inquirer states that the iPAQ is marketed and sold principally as an ADP machine - versions of the 6500 are currently marketed as “Pocket PCs” on HP website. However, when we “clicked to purchase” an iPAQ on the HP website we were linked to the website of Cingular - a well-known cellular phone retailer. While we found the iPAQ on Cingular’s website through the “PDAs only” drop-down menu, we noticed that the same website provided “Phone Details” and “Phone Features” for the iPAQ. More generally, it is the observation of this office that devices similar to iPAQs are sold by cellular phone retailers and advertised among cellular phones.

Moreover, HP iPAQ hw6500 Mobile Messenger, Frequently asked questions and answers states that the target market for the iPAQ is “mobile professionals who want access to their email and business/corporate data seamlessly and with enhanced security, whether they are in the office or on the road.” Several other questions and answers tout the ability of the iPAQ to keep the user in touch with the use of “global wireless technologies” that have “roaming capabilities world-wide” and allow users to “share the moments as they happen”. We conclude that consumers purchase iPAQs mainly because of their ability to transmit data in all situations and locations, and at all times, not just in hotspots. This ability is only possible when the user subscribes to a cellular phone service provider.

Economic Practicality & Purchaser’s Expectations

CBP consulted the Cingular website for information on billing rates and discovered that Cingular offers plans for voice calls only, data only, and smartphones only, though a consumer can purchase and use the voice and data plans simultaneously on the same device. The smartphone plans are for specified phones that are not under consideration here. Data only plans range in price from $19.99 to $44.99 per month. Voice plans range in price from $39.99 to $199.99 per month, and offer discounts on the cost of a data plan (on all but the lowest data connect plan - offering 5MB per month), if purchased as an option on a voice plan. Based on this information, it appears that the iPAQ is cheaper to use if a consumer subscribes to a data only plan rather than a voice only plan.

However, we weigh this information against the expectations of purchasers of the iPAQ, information on which comes largely from the way in which the iPAQ is marketed to prospective purchasers. We believe it is reasonable to assume that the image of the iPAQ portrayed in marketing materials shapes consumers expectations. As previously stated, CBP concludes that consumers purchase iPAQs mainly because of their ability to transmit data in all situations and locations, and at all times, not just in hotspots. This is only possible when the phone feature is functional. Furthermore, once functional, the phone is an added way by which users can stay in touch and also eliminates the added expense and inconvenience of a separate cellular phone. In sum, we find that consumers purchase an iPAQ or other similar device, in part, because of the phone feature; not subscribing to a phone service plan diminishes the economic practicality of acquiring and using the iPAQ.

Finally, the importer notes that over 75% of the cost of components of the iPAQ is associated with its computing function. We do not dispute that this information must be taken into consideration.

Based on all the information above, we find that the principal function of the iPAQ cannot be determined. The device has the physical characteristics of both a handheld ADP machine and transmission apparatus; prospective purchasers expect to be able to use it as a phone, for its computing functions, and to transmit data wirelessly whether or not in a hotspot; it is advertised as being able to be used globally; it is sold by cellular phone retailers; and, over 75% of the cost of its components is associated with its computing functions. We find that the importer has not been able to establish the principal function of the device. Consequently, based on the information we have, we cannot establish a principal function in accordance with Note 3 to Section XVI.

With regard to multi-function machines, the General ENs to Section XVI, HTSUS, provide, in pertinent part:

(Section Note 3)

In general, multi-function machines are classified according to the principal function of the machine.

Where it is not possible to determine the principal function, and where, as provided in Note 3 to the Section, the context does not otherwise require, it is necessary to apply General Interpretative Rule 3(c); such is the case, for example, in respect of multi-function machines potentially classifiable in several of the headings 84.25 to 84.30, in several of the headings 84.58 to 84.63 or in several of the headings 84.69 to 84.72.

Having been unable to determine the principal function of the iPAQ, we apply GRI 3(c), as per the General EN to Section XVI above, and classify the merchandise under the heading which occurs last in numerical order among those which equally merit consideration. Therefore, we find that the HP iPAQ is classified under heading 8525, HTSUS, as transmission apparatus.

Finally, for the sake of completeness, we address the fact that all models of the iPAQ are imported boxed with a lithium-Ion 1200 mAh removable/ rechargeable battery, removable flip cover, stereo style headset with 2.5 mm jack, AC adapter, charge adapter, desktop synchronization cradle, stylus, belt case, manuals, and a HP iPAQ Pocket PC Companion CD.

With regard to the CD, Note 6 to Chapter 85, HTSUS,

This note has been deleted from the 2007 version of the HTSUS. However, this deletion does not impact this classification decision. provides:

Records, tapes and other media of heading 85.23 or 85.24 remain classified in those headings when presented with the apparatus for which they are intended.

This Note does not apply to such media when they are presented with articles other than the apparatus for which they are intended.

The General ENs to Chapter 85 further explain, in relevant part:

When the media are presented for articles other than the apparatus for which they are intended, the following classification principles should be applied:

(1) If the media and the other articles make up a set for retail sale under General Interpretive Rule 3 (b), the set should be classified by application of that rule[.]

Based on the foregoing, we find that all the subject articles imported together are a set for classification purposes under GRI 3(b), which states that goods put up in sets for retail sale shall be classified as if they consisted of the material or component which gives them their essential character. All the items are classifiable in different headings, are “put up together” to enable a user to conduct both wireless Internet activity and radiotelephony, and are offered for sale directly to users without repacking. Consequently, the items may not be classified separately under their respective classifications. Furthermore, CBP finds that the item which imparts the essential character of this set is the iPAQ. It is the dominant component, by use and cost in relation to the other constituent components of the set. It is also the reason why a consumer would purchase the set.


By application of Legal Note 3 to Section XVI and GRI 3(c), the HP iPAQ 6500 Series Mobile Messenger is properly classified in heading 8525, HTSUS, which provides for: “Transmission apparatus for radiotelephony, radiotelegraphy, radiobroadcasting or television, whether or not incorporating reception apparatus, or sound recording or reproducing apparatus,” and is specifically provided for in subheading 8525.20.9070, HTSUS, which provides for: “Transmission apparatus incorporating reception apparatus: Other radio telephones designed for the Public Cellular Radiotelecommunication Service: Other.” The 2006 column one general rate of duty is free.

Pursuant to title 19 United States Code, Section 3005, the Harmonized Tariff Schedule of the United States is in the process of being amended to reflect changes recommended by the World Customs Organization. The amendments are expected to affect the classification of your merchandise. On January 4, 2007, Presidential Proclamation 8097 containing these changes was published in the Federal Register. See 72 FR 453, Volume 72, No. 2. The proclaimed changes are effective for goods entered or withdrawn from warehouse for consumption on or after February 3, 2007.

Once those changes are in effect, it is anticipated that your merchandise will be classified in subheading 8517.12.00, HTSUS.


Myles B. Harmon, Director

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