More Consumers Pick Up Handheld Computers As Their Uses Expand
Hope this isn't a repeat post
By Paula Felps, The Dallas Morning News
Nov. 16--Retailers have noticed, as have businesses large and small. The news hasn't been lost on consumers, either: The personal digital assistant is making a big splash.
Over the last year, sales of these handheld computers, called PDAs, have skyrocketed. They've been driven by
robust competition among hardware manufacturers, lower-priced models, increased functionality, hundreds of
software releases, advertising and word of mouth, analysts say.
The market is growing "by leaps and bounds every day," says Kenny West, president of PalmGear H.Q. in Arlington, an online store that sells PDA hardware, software and accessories.
"We are seeing record traffic on our site, and people are staying on there an average of 14 minutes. The industry average, Web wide, is less than four minutes."
Compaq, with its iPAQ, and Sony, with its Clie, were among hardware manufacturers who threw their hats into the ring this year. Hewlett-Packard, Research in Motion and Casio updated their lines. Palm, which first found broad success with PDAs and still rules the roost, unveiled a budget model and imbued another with the ability to access the Web wirelessly.
Not to be outdone, Handspring regularly announced expansion modules for its Visor, as well as new editions. Adding to the feverish pace of advancements was Microsoft, which released the latest version of its operating system for handhelds, the Pocket PC.
When purchased, PDAs "are toolboxes that are empty, and the consumer fills them up with what they need," says Laura Rippy, CEO of Handango. The Hurst company sells software, hardware and accessories for the small computers.
"What we see is that people will gravitate to them initially because they want something that can manage their schedule. Then, as they become more tech-savvy, they realize the PDA is really a small computer and they can do more with it."
And doing more they are.
The personal digital assistant has quickly become a platform where technologies intersect. Calendar, to-do list, notepad and address book functions have been the bread and butter for handhelds since the beginning. Within the last year, though, PDA manufacturers and third-party developers have empowered some models to make phone calls, play digital music, track locations via the Global Positioning System, take and display photos, send e-mail and yank information such as movie times, directions and stock quotes off the Web.
A PDA doesn't necessarily perform these new tasks as well, easily or inexpensively as single-function products. Few, however, would argue that most of those products are as portable or adaptable as the ever-evolving PDA.
Few, too, could have envisioned the scope of these developments seven years ago, when Apple Computer trotted out the handheld Newton, which sold poorly and was abandoned in 1998. As the Newton sputtered, Palm slowly began building the market with its 1996 introduction of the PalmPilot.
PDAs caught on gradually, embraced first by executives looking for ways to organize their working lives.
"Business users are in meetings all the time," says Steve Koenig, a senior analyst at PC Data. "Someone walks in and sees a Palm and says, `Hey, that's cool. How much was it? $299? That's not bad.'"
According to estimates by the Reston, Va.-based market research firm, annual sales of handhelds in the United States didn't exceed 1 million units until 1999. Of the 1.5 million units bought last year, nearly a third of those sales came in the fourth quarter, Mr. Koenig says.
The momentum hasn't let up since. About 2.2 million PDAs were sold in the first nine months of 2000, PC Data figures. Mr. Koenig expects buyers to snap up at least 800,000 more during the last quarter to surpass 3 million for the year.
"It's going to be a huge seller this Christmas," he says.
Competition is one factor, industry experts say, although two operating systems are dominant.
More than 90 percent of PDAs sold in September ran Palm's operating system, according to PC Data. Among them were Palm's own products, Handspring's Visors and new models by Sony and IBM.
Microsoft's Pocket PC is the second-most-popular operating system. Others include Symbian's EPOC, V-Tech's VT-OS and the format that Research in Motion, also known as RIM, uses in its Blackberry line.
"Whenever you have increased competition," Mr. Koenig says, "that increases the noise, the buzz about the products."
A range of prices also has contributed mightily to the handhelds' surge.
Lower-end models such as Palm's m100 and Handspring's basic Visor list for $149, hundreds of dollars less than the two companies' flagship models. V-Tech sells a $179 model called the Helio and this week introduced the E-Mail Post Box Express, which has a built-in keyboard. Included among its features are an address book, organizer, Web browser and e-mail capability. The Express, at $79, is aimed at students. A model for older adults, the $99 E-Mail Post Box Companion, boasts larger fonts and a bigger keyboard.
New colored models, more software titles and the ability of some PDAs to play entertainment-related files are also clear evidence that the industry has expanded its marketing focus beyond the boardroom to include consumers and small businesses.
Handspring, for instance, is promoting the Visor on billboards in major cities, including Dallas. The device is
now being sold at Target, in addition to office supply, electronics and online stores.
Industry observers say that while large corporations played a key role in the sales explosion by buying handhelds for employees, smaller companies are waking up to the PDA's potential.
"We're seeing small businesses, places with 15 or 30 employees, buying Palms and Visors to integrate into business use," says Mr. West of PalmGear H.Q. "They're realizing it's not as complex to integrate that into
business operations.
"You can do things now like edit Word documents and customize software for your own applications."
PDAs have caught on within the medical profession, too.
At www.handango.com, Ms. Rippy says, the most-used search words by visitors are "medical" and "medicine." That realization prompted Handango to create an entire medical software suite.
"We're seeing that a lot of the software being sold is for more serious productivity applications," she says. "Doctors see handhelds as a very ready tool. They realize they can save so much time with them."
One company that develops software for medical professionals is e-MDs of Cedar Park, Texas.
Recently, e-MDs introduced evaluation and management coding software for the PDA that permits physicians to enter and organize information under the proper codes, which are used for records and billing.
Physicians can lose as much as $50,000 annually with incorrect codes, e-MDs says. Another PDA application is the 2000 Physicians' Desk Reference, available in a module for the Visor.
Medical programs play a small role in the software boom, though. Nearly 10,000 titles for databases, word processing, other productivity applications and entertainment are available. The number increases daily.
"Right now, the real hot thing in software is anything related to education," Mr. West says. "That may be because school just started, but the top searches are going to educational software."
As software developers push the possibilities for applications, so do hardware companies. But no one company has generated more excitement among PDA users within the last year than Handspring.
Formed by three inventors of the original PalmPilot, Handspring designed a slot in its Visor that can accept small, pop-in modules.
The company and its partners have been rolling out modules that include everything from golf games to digital cameras, from MP3 players to modems. A recent release, the OmniRemote, turns a Visor into a television remote control.
"Right now, I have my MP3 player in there, and I also use the OmniRemote at home," says Mr. West. "I'm waiting for the Visor Phone to come out, and then I'll only have to carry one device."
The Visor Phone is expected within weeks. This module will transform the PDA into a wireless voice communications device.
Although critics are dubious about call quality, Palm reacted by announcing a snap-on cell phone accessory for
its Palm V, due out in early 2001. Motorola and Microsoft are looking at similar creations.
"The point is you can't find a cell phone that can do all the things a PDA with a phone can do," Mr. West says.
An all-inclusive PDA is definitely in the future, says Paul Whitaker, director of technology partnerships for
Dallas-based AnywhereYouGo.com, a developer of wireless applications.
"There are a lot of issues to work out from the consumer point of view," he says. "But when I ask people, `What would you want in the ultimate handheld device,' what I'm hearing is they want color [screens], they want a longer battery life, wireless connectivity, more memory and music. ... And we hear that people wish they could use it for a phone."
Those wish-list items are either already on store shelves or in the works. Two MP3 players for the Visor currently exist; a voice recorder is also for sale.
Compaq's iPAQ and Hewlett-Packard's Jornada have music capabilities and color screens. The Palm IIIc and the new Visor Prism have color displays.
Among the recent developments in the market, industry insiders say a significant one is the ability to transform
PDAs into wireless communicators.
"The first wave of wireless were simple Web-clipping applications, but now the next generation is emerging,
which allows professionals to be more productive," says Handango's Ms. Rippy.
"I think the RIM technology speaks very well to this; the Blackberry is taking off like hotcakes."
The Blackberry is much like a two-way pager with a built-in keyboard, but it also includes the calendar, address book, memo pad, calculator and other common features. Among PDAs, the Research in Motion device competes in the wireless e-mailing market with the Palm VII.
Handango is "very passionate about wireless," says Ms. Rippy, who predicts that the technology "is the way the
industry is headed."
AnywhereYouGo.com's Mr. Whitaker agrees. He compares the market for PDAs to that of personal computers a decade ago.
"Just like the PC became more than just a business tool, the PDA is becoming a personal tool for gathering news, staying organized and staying connected," Mr. Whitaker says.
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