
Like many words of foreign, and especially English, origin it has simply become eingedeutsched and accepted. It is no more of a curiousity to germans than the the verb managen's past participle form "gemanagt."
A lazy Sunday of surfing put me across a mention of the Motorola HT 220 Handie Talkie which prompted a quick google. It turns out the word Handy comes to German from English after all. In fact, it seems to come from Motorola's Handie-Talkie.
The Handie-Talkie was introduced during the Second World War by Motorola as a handheld successor and companion to its already successful Walkie-Talkie (or "breaky-backy" as it was known to the troops) - a backpack based radio transmitter.
It seems this image of the American GI with his Handie-Talkie took hold in Germany and the usage has been around ever since. It has been used for various mobile radio devices from companies like Bosch and Siemens either as Handie or Handy.
So the next time the topic comes up, you can confidently inform your German colleagues of the origin of the German usage of the word Handy for a wireless radio. An advertising exec in Chicago invented it for Motorola in 1940 and it's been knocking around Germany since its arrival with U.S. Forces.
If you read German, more can be found here and here.
If you're generally interested in germanized english words, the Verein Deutsche Sprache maintains a list of them here.
