January 25, 2001
Market for Hand-Held Computers
Doubled Amid Slowing PC Sales
By PUI-WING TAM
Staff Reporter of THE WALL STREET JOURNAL
Personal-computer sales may have slowed, but the U.S. market for
hand-held computers doubled to more than $1 billion last year, according
to a study being released Thursday.
The study by market research firm, NPD Intelect, underscores the rising
popularity of what are variously called organizers, pocket PCs and
personal digital assistants. Revenues from selling such products hit $1.03
billion in 2000, more than twice the $436.5 million sold in 1999. In terms
of unit growth, manufacturers sold 3.5 million devices in 2000, more than
two-and-a-half times the 1999 figure of 1.3 million.
In one worrying sign for the industry though, NPD noted that the average
selling price of hand-held computers dropped 11% to $293.51 in 2000,
suggesting pressure on manufacturers' profit margins. The price decline
"reflects that there is now more choice in the market," said Sima Vasa, vice
president of tech products at NPD, which is based in Port Washington,
N.Y. "It's up to each manufacturer to continue differentiating themselves
from the competition."
Growth Stands Out
While those sales totals pale in comparison with numbers put up by the
much larger PC and mobile-phone industries, the growth rate stands out in
a tech sector that has been hobbled by earnings warnings from mature
hardware and software companies. Meanwhile, in sharp contrast to
hand-held devices, U.S. PC sales grew just 10% in 2000, according to
Gartner Group Inc.'s Dataquest unit.
Indeed, for hand-held device makers, 2000 could well be the year in
which their products moved from being niche tools for mobile professionals
to something that mainstream American consumers bought in large
numbers.
"The increasing sales speaks to acceptance of the category in the consumer
marketplace," Ms. Vasa said. "The hand-held device space is just heating
up."
A Pivotal Year
Indeed, 2000 was also a pivotal year for the industry as competition in the
hand-held market increased. Two dominant manufacturers, Palm Inc. and
Handspring Inc., offered stock to the public for the first time. Other giant
companies also jumped into the market. Sony Corp., for instance, late last
year unveiled a device called Clie that also uses the Palm software.
Behemoth Microsoft Corp. tried to step up its attack on Palm. It
introduced an updated version of its Pocket PC software, taking aim at its
rival with an ad campaign that asked "Can your Palm do that?" Yet, Palm
remained entrenched in its top spot in the market, which ignited after the
company released its Palm Pilot organizer in 1996.
NPD said Palm's unit share in 2000 was 72%, down from 78% in 1999,
but still far ahead of No. 2 Handspring, which had a unit share of 14%.
Handspring, which also uses the Palm operating system, was started by
Palm co-founders and entered the market in 1999.
Companies that use Microsoft's Pocket PC software had mixed results.
Casio Inc. saw its unit share decline to 6% in 2000 from 11% in 1999.
Hewlett-Packard Co.'s share slipped to 2.3% from 2.9%. But Compaq
Computer Co., which began shipping its iPaq device last year, grabbed
2% of the market, up from virtually nothing in 1999, NPD said.
Write to Pui-Wing Tam at pui-wing.tam@wsj.com |
