Uphill battle for handhelds

11 Dec 2002

After a period of steady development, the handheld personal digital assistant (PDA) market underwent a number of big developments during 2002, while next year could be a make-or-break-year for the format.

Although continually improving in power and capability, the handheld market is at present declining.

Much of this may be an extended hangover from the boom years when handhelds were de rigueur, executive accessories, but it is still worrying news for those in the market. The latest figures from Gartner Dataquest revealed that worldwide PDA shipments totalled 2.55 million units in the third quarter of 2002, a decrease of 2.4pc from the same period last year. In the US, a handheld stronghold, shipments totalled 1.21 million, showing a 1.4pc decrease.

Despite declining sales, interesting things have been happening. For a start, market shares have shifted around somewhat. Palm and its operational system (OS) licensees have long held top spot. While Palm itself remains on top, the No. 2 slot has now gone to Sony, whose innovative take on the Palm format has pushed it ahead of the other main Palm licensee, Handspring. The merger of Hewlett-Packard and Compaq has joined two of the biggest manufacturers utilising the Microsoft Windows Pocket PC OS.

Meanwhile, Dell has just entered the market with budget level Pocket PC handhelds, a move that may shake up the market somewhat.

On the technology front, plenty of exciting things have been happening, especially on the wireless front. Bluetooth is fast becoming a default option for high-end models. HP’s iPaq handhelds were one of the first to integrate this and by now most of its high-end models feature the solution. Palm jumped on the Bluetooth bandwagon with its integration into recent Palm Tungsten T and Toshiba is also selling Bluetooth models. Bluetooth enables wireless connection with other Bluetooth-enabled devices such as mobile phones, laptop PCs and other handhelds. For handhelds, the most immediate applications are wireless connection to the net via a mobile phone or wireless synchronisation with a PC.

The other development on the wireless front is the emergence of PDAs with built-in Wi-Fi (802.11b) wireless networking. Both HP and Toshiba are selling models with built in Wi-Fi at present and other manufacturers won’t be far behind. Wi-Fi has been taking the world by storm of late. Outside of businesses and home users, Wi-Fi networks have begun to spring up in public places and Wi-Fi-enabled coffee shops are becoming quite popular in the US.

Some of these public networks are free, community-based initiatives, while others are commercial ventures. In Ireland, both O2 and Eircom have been trialling Wi-Fi hotspots with a view to launching a commercial service. While mobile internet access can already be achieved with a handheld via a mobile phone, using a Wi-Fi network with a handheld provides access to a high-speed data network, far superior to anything offered by a mobile phone.

Form factor is another arena where changes are happening. For a long time, most handhelds looked the same with a touchscreen and pen-based interface complemented by a couple of buttons. Sony has been very much the innovator in this area. It’s latest model, the Clie PEG-NR70V, features a folding design that incorporates a full Qwerty keyboard.

The other major innovation this year is the integration of mobile phones into handhelds. Handspring launched the Treo 180 this year, a Palm-based handheld with integrated mobile phone. The product has since been superseded by the Treo 270, which adds a colour screen to the mix. Palm is also moving in this direction and the new year should see the launch of the Palm Tungsten W, a handheld/mobile hybrid. Others have also entered this arena, a case in point being O2’s xda, a hybrid featuring the Pocket PC OS.

However, despite these new innovations, declining sales mean that handheld manufacturers face an uphill battle. Other products could also cause problems. At the moment, the stalking horse is Symbian, an OS that is the result of collaboration between mobile manufacturers such as Nokia, Ericsson, Motorola and Siemens. Mobile phones are fast becoming powerful computing devices in themselves and the Symbian OS is beginning to come into its own. At present, the only device to challenge traditional handhelds is the Nokia 9210. However, the recent Nokia 7650 is a case in point. Although heavily marketed as a camera phone, the handset has a Symbian OS and uses Nokia’s Series 60 user interface.

Despite lacking a touchscreen and stylus, the phone features much of the functionality associated with a PDA such as diary, contacts management, notes and email. Series 60 isn’t confined to Nokia and Panasonic, Siemens and Samsung are already licensees. Another example of the potential of Symbian is the upcoming Sony Ericsson P800, a phone featuring touchscreen and pen interface and much of the functionality associated with handhelds.

Although mobile manufacturers lag behind the traditional handheld manufacturers, they do have the weight of numbers behind them. According to Nokia, they’ve already sold one million 7650s in Europe so far and 2.5 million handhelds have been sold worldwide in the third quarter of 2002. Nokia says it is hoping to sell 10 million Series 60 devices by the end of the year. With these kinds of numbers, Symbian could well steal the show.

By Dick O’Brien