PDA Sales Slump on Slack Corporate Demand

Reuters ^ | Mon January 27, 2003

[new cruelty]

NEW YORK (Reuters) - Handheld computer shipments slumped in 2002, as an expected boom in demand from corporations failed to materialize, according to an industry study released on Monday. Worldwide shipments of personal digital assistants, or PDAs, the pocket-sized digital companions that can store thousands of appointments, contacts and notes, fell 9.1 percent to 12.1 million units in 2002, according to Dataquest Inc., a unit of research firm Gartner Inc.

"The more lucrative enterprise market has been stagnant because of poor economic conditions and a perception that PDAs are not yet capable of delivering sufficient return on investment," said Todd Kort, principal analyst for Gartner Dataquest's Computing Platforms Worldwide group.

He estimates that about 70 percent of all PDAs are purchased by consumers and only 30 percent by enterprises.

More than 20 million PDA have been sold in just over 5 years, sparked by early enthusiasm over the gadgets. But consumers, lacking compelling reasons to upgrade, have not hungered for newer models in the same manner.

Manufacturers had pinned hopes on corporations buying the devices in bulk to outfit their staff with a powerful means to take work on the road, and to allow users to communicate with their offices. But the global economic slowdown forced most companies to reassess technology spending plans.

"A lack of significant progress in wireless PDA technologies has resulted in some companies waiting to purchase these devices," said Kort. "The enterprise market is still another year away from embracing PDAs."

Palm Inc. PALM.O , the dominant maker of handheld computers, saw its shipments decline 12.2 percent worldwide in 2002. Still, the 4.4 million units it shipped last year were double the shipments by its nearest competitor, and more than the combined total of its five closest competitors.

Palm device shipments represented 37 percent of the overall market, Dataquest said. Palm also continues to lead the market for the software that powers handhelds, with a 56 percent stake, compared with rival Microsoft Corp.'s MSFT.O 26 percent.

Hewlett-Packard Co. HPQ , the No. 2 maker of handheld computers, shipped 1.6 million units in 2002, down 27 percent from the year before.

Sony Corp. 6758.T vaulted to No. 3, on a 351 percent jump in shipments, to 1.3 million units. Conversely, Handspring Inc. HAND.O , which shifted its focus away from handhelds toward mobile phones, shipped only 698,000 PDAs, down 49 percent, Dataquest said.

Dell Computer Corp. DELL.O , which stirred the handheld computer market late in the year with the introduction of its first line of PDAs, shipped 54,000, according to the study.

[new cruelty]

... a perception that PDAs are not yet capable of delivering sufficient return on investment.

Anyone here getting a good ROI on their PDA? RSVP : )

[junta]

Every person that I know of that bought one of these spends all their time fooling with it instead of working productively.

[NYS_Eric]

Long-time PDA user (original Palm, Handspring, IPAQ 3630, and finally my all-time favorite, the IPAQ 1910).

Couldn't live without one of these babies. My life is on there (all encrypted and hot-synched daily, of course!).

[Mr. Jeeves]

I've had an iPaq for a while and I use it every day. The wireless Internet was unreliable, though. When reliable broadband Internet access can be delivered for PDA's (inluding real-time video) sales will skyrocket. Most corporate users still prefer notebook computers at this point.

[Koblenz]

When a reliable device comes out that combines an iPaq with a cellphone, I might upgrade. For now, my palm is about 5 years old, and still uses AA batteries, when I take it out (almost never). My phone is still black and white, but I can get to my email and online address book, so it's the only thing I carry on a daily basis. It also gets me to news, stock quotes, and weather.

[Astronaut]

I agree with your point about reliable broadband internet. Until that happens, a PDA is just a very expensive address book. Even though some people constantly clamor for it, Apple has wisely chosen to stay out of the PDA market, even though they invented it with the Newton over a decade ago.

[new cruelty]

I've owned a few in the past few years. I liked using the Journada most. However, inevitably they all ended up gathering dust on my desk.

I can see how productivity would be affected. I think the ROI will be realized once the cell phone and pda merge into a light weight product (which is already available in various forms). Ideally, I would like to see such a device in the form of eye glasses, wherein the User can operate using eye movement and hand motions, though that might look a bit odd to the casual observer.

[Cosmo]

I'm betting Apple will come up with a hybrid PDA/iPod fairly soon.

[cdefreese]

Notebooks are getting smaller, PDAs more integrated and feature packed, same goes with Cell phones. Pretty soon all 3 will merge. I believe that everyone who needed a PDA has one and until there is a reason to get another one (broadband), sales will remain relatively even.

[SamAdams76]

My company actually saved money last year by recalling all PDA devices, phasing out desktop computers and handing out IBM Thinkpad laptops. Those PDA devices were essentially worthless. With the laptops, you can do everything either from the office or from the field. We can even connect to the Internet with them using our Nextel phones so Internet is always available no matter where we are.

When you consider that most PDAs that are internet capable go for $599 (plus extra per month for connectivity) and you can now get state-of-the-art laptops for under $1000 with wireless connectivity using phones you already own, not to mention the money saved by eliminating desktops, converting to laptops is a no-brainer.

[new cruelty]

Sounds like a smart move on your company's part.

I prefer using a laptop for mostly the same reasons you mentioned. On projects requiring field surveys using CAD floor plans and symbols, I prefer using a tablet PC over a PDA.

[George W. Bush]

It's astonishing how useful these devices really are. When I bought my 16MB Handspring Visor, I kept thinking "I might not really use it." But it is very useful. I'm quite surprised at the number things it can do.

I've read more books off it than I've read in years. I can take most any Acrobat document on it (I have a 256MB flash expansion on mine). I can subscribe to news sites and other web sites and download them all and take them with me anywhere. I put a KJV Bible and about 50 volumes of commentary and reference materials on it.

I even like playing FreeCell on it when I have a few spare minutes. I have Word and Excel compatible programs too. Another thing is that a lot of the programs are quite powerful but don't cost much. Another real strenght of all models of PDA is the ability to synchronize with M$ Outlook. All changes on either the computer or the PDA are resolved and updated when you sync. If you like Outlook's scheduling/to-do/task/contact management, the PDA will let you take it on the roard very easily.

I like the newer color models but can't quite justify buying one already. But I'm sure I will.

Especially interesting are the newer PDAs that are also cell phone (Sprint cell service). You get a color PDA with cellphone and wireless Internet in a single package though the cell/internet service is mostly metropolitan, not too useful for rural people.

If you're thinking of buying one, the industry is saying that PDAs will merge into cell phones. They may be right.

Over the next few years, look for PocketPC models to get even bigger than they are now. The Palm devices will be moving away from the old Motorola 680x0 family of processors and move to a newer processor, requiring all the programs to be updated, I expect. Have to wait and see but usually switching CPUs means updating all programs for the units.

I really use my PDA for phone numbers and addresses and appointment/calendar stuff. It has made me much more attentive to those things where I would never keep up with it on the computer or on paper. With the PDA, I can do some it when I'm out and about and some of the rest of it I can do if I'm watching the news during the commercials.

What is really going to make these things useful is when they get cheap Bluetooth networking. Then you can wire your house, your car, your office with Bluetooth access points cheaply and they'll be connected all the time. If I could figure out which PDA company was going to win the Bluetooth war, I'd actually buy some stock.

Another technology to watch is the TabletPC. Much more expensive but people are really starting to like those. They might kill off both notebooks and PDAs. Haul 'em around just like you would a notepad. Price is still too high right now except for geeks and corporate execs.

[new cruelty]

Great post! Thanks for the useful information.

There was a time when I was out in the field, flying around the country, and required constant use of a PDA. It came in handy for all the things you mentioned, plus, while waiting around with other business travellers at the airport, I would sometimes use it to give ad hoc demos of my company's products and services. So, I can see where the ROI would come into play in some instances. In my current postion, I get by just fine with a 100 page note pad, a cell phone, a laptop, and the ocassional use of a digital camera. My journada and ipaq are just collecting dust for now. My wife uses the palm pilot for her ob-gyn practice, storing patient history, scripts, and the physician's desk reference.

[George W. Bush]

My journada and ipaq are just collecting dust for now.

Strangely, it's my notebook computer which gathers dust while I use my desktop and my PDA.

This tells me that a Bluetooth-enabled TabletPC might be my next machine, ready to go on the road or sit on the couch with me.

I look for Tablet-format machines to really take off in the next few years when they break the $1000 price point. People are tired of being tied to a clunky desktop box and they're tired of having all that equipment cluttering up their desks.

[new cruelty]

This tells me that a Bluetooth-enabled TabletPC might be my next machine, ready to go on the road or sit on the couch with me.

Like a laptop. : )

Just kidding. With all of its applications, Bluetooth looks very promising.

I am always curious how companies come up with names, like Bluetooth, RedHat, Journada, etc. Do you know where the name Bluetooth derive from?

[Gamecock]

a PDA is just a very expensive address book

I must disagree. While they do function very well as an address book and appointment calender, that does not even scratch the surface of what they are capable of doing.
I use mine to track patients, store medical books and drug references. (meaning I don't have to carry heavy references around in my lab coat) With the attachable keyboard and a Word emulation program, I can type memos, and take notes in meetings.
I can hot-sync in the morning and have the lates news downloaded to read at my leasure. I always thought I wanted a laptop, but they are, IMHO, not portable, but transportable. My Visor offers true portability.

[razorback-bert]

I just bought a Palm iiic(moved to color from pocket PC), can someone recommend a good mapping program.

I have the lastet from Delorme on my desktops and notebooks, but the reviews of Xmap are bad.

[Aquinasfan]

When you consider that most PDAs that are internet capable go for $599 (plus extra per month for connectivity) and you can now get state-of-the-art laptops for under $1000 with wireless connectivity using phones you already own, not to mention the money saved by eliminating desktops, converting to laptops is a no-brainer.

Makes sense to me. Plus you have a readable screen.

[new cruelty]

I just bought a Palm iiic(moved to color from pocket PC), can someone recommend a good mapping program.

Take a look at this site. Perhaps that will help.

[300winmag]

I am always curious how companies come up with names, like Bluetooth, RedHat, Journada, etc. Do you know where the name Bluetooth derive from?

"Bluetooth" is named chosen by the developers of the specs, Ericsson. It's named after the first Christian king of Norway, who united the country.

Bluetooth is built in on my Palm Tungsten, and I have inexpensive (~$40) USB Bluetooth adaptors in my two desktop PCs so I can experiment. Bluetooth hotsyncs are a snap, but some of the other functions available under the Bluetooth protocol aren't too well documented, so I have to experiment. Bluetooth communications between Palms is far superior to the IR stuff.

I do computer support in a large hospital system. The medical people love Palms, due to the large amount of specialized software for it. The IT people don't use Palms because they're tied to their PCs on the LAN.

I depend on my Palm for all my daily work, because I use it for the same reason the medical and lab people do. It's MY device on MY belt, and it carries the reference materials I want. I don't have to search out an unused networked PC to get some information.

If my desktop systems vanished today, I could get by. I'm totally lost without my Palm, though, because it's tweaked to carry the stuff I need most. That includes a half-dozen games and a dozen books. I can do my work, goof off, and get some quality reading all done on the same device.