We don’t often hear the phrase personal digital assistant (PDA) these days and that acronym is just as likely to conjure-up other images, particularly amongst the younger generation. While once handhelds like the Apple Newton and the PalmPilot were on the cutting edge, today traditional PDA-type handhelds are being eclipsed by converged mobile devices. That doesn’t mean that the humble handheld won’t have a role.The growth is definitely, however, in the converged device segment. By combining a PDA with phone, text and e-mail capabilities, converged devices address the convenience factor by letting the mobile professional carry just one device instead of many.
The market numbers show it’s an attractive proposition. North American data from research firm IDC shows 13 consecutive quarters of decline for handheld devices. In the first quarter of 2007, IDC reports vendors shipped just over 900,000 handheld devices, which was 36.3 per cent less than the previous quarter and 40.3 per cent less than the same quarter a year ago.
Dell is out
One vendor, Dell, has left the segment all together in the face of declining shipments, failing to announce a replacement for its Axim X51 series. It will clear-out remaining inventory and instead sell third party devices on its website.
IDC ranked Dell as the number four vendor in the space in Q1. In top spot was Palm, followed by Hewlett Packard and Mio, with Sharp in fifth spot. All saw sharp declines in shipments with the exception of Mio, which introduced two new products, and is a leader in GPS functionality.
Eddie Chan, an analyst following the mobile computing space for IDC Canada, says the numbers aren’t surprising. Indeed, he says the market transition from handhelds to converged mobile devices has been ongoing for the past several years, with the handheld market in steady decline since 2002.
“The adoption of converged devices has primarily been driven by two killer applications: voice and text communications,” says Chan. “You have these devices, and what do you want to do with them? You want to be connected with them.”
The growth in converged devices is also being driven by the desire of mobile professionals to simplify their lives. With a converged device combining a PDA with a phone, camera, MP3 player and e-mail/Web browser, that’s potentially four less devices to carry on the road.
“There is an increasing trend in terms of simplifying your life, whether it’s personal or professional,” says Chan. “Just to carry one less device, one less power cord when you’re traveling, that definitely is compelling.”
That’s not to say converged devices don’t have their downsides.
“There are challenges when you throw everything but the kitchen sink into these devices,” says Chan. “Obviously battery life becomes more important.”
Another drawback is the still high cost of data plans from the cellular providers. For these reasons, Chan says he doesn’t ever see the handheld side of the equation going down to zero.
Indeed, handheld manufacturers are addressing the market shift by putting new spins on their product lines. With the growing prevalence of WiFi connectivity on corporate campuses and in the community, WiFi connectivity is increasingly a feature of handhelds. And, as Mio has shown, GPS capability can also be a compelling business case.
While it still leads the handheld market, IDC notes Palm has yet to introduce successors to its Palm Z22 and Palm TX devices, which were introduced late in 2005. Indeed, Chan notes Palm seems to be focusing on its Treo smartphone line, and consequently has seen its lead over second place HP shrink.
“HP is still around and they’ve refreshed their product line,” says Chan. “It’s still a profitable business for them.”
HP remains committed to this market; along with the rapidly-growing converged device segment says Marwan
Al-Najjar, HP’s iPAQ product marketing manager.
“We’re definitely seeing the shift,” confirms Al-Najjar. “But it depends on who your customer segment is.”
While the market for handhelds is declining, Al-Najjar says they are still a fit in certain segments. Consumers, he says, are still looking for basic devices that offer contact management and maybe offline e-mail. And for the cost conscious small business, wary of expensive data plans, handhelds can be a good fit.
“There are still SMB customers that are looking to mobilize an application to address a specific line of business need, and they’re saying for what they need it for they don’t need an all-in-one,” says Al-Najjar. “They need an advanced PDA to increase the productivity of their field force.”
There’s a middle-ground between the PDA of old and today’s converged devices: a modern handheld with WiFi, Bluetooth, and the horsepower to run line of business applications in the field. That’s the market where HP is finding success with handhelds, says Al-Najjar.
“We’re seeing success from an HP perspective where they’re just looking at a mobile device like an iPaq PDA without the phone capability to mobilize certain applications and line of business,” says Al-Najjar. “We’re addressing the customer choice.”
Also helping to maintain the viability of that handheld market says Al-Najjar is the high cost of voice and data plans. While the business case is definitely there for mobile executives, in certain cases a point device is still the most cost effective solution.
“Once we start to see some competitive data plans and voice plans, then we could see more enterprise customers moving to all-in-ones,” says Al-Najjar, adding that HP remains committed to both product categories.