Although they're still waiting for 3G to boost the handheld market,
consumer and business suppliers have several cunning PDA tricks up
their sleeves.
There have been major shifts in the market for mobile devices. The
convergence of handheld devices and wireless phones has produced a
more competitive market, in which IT vendors, electronics suppliers
and mobile phone manufacturers are all fighting.
One of the signs of change came in July 2001, when Psion pulled out
of the market. There was a great deal of hype surrounding handhelds
in 2000 - in 2001, that changed as the market began to consolidate.
This year, further consolidation and convergence are going to be
the hallmarks as personal digital assistants (PDAs) get closer to
mobile phones. But Mark Klein, product marketing manager of
handhelds at Sharp, says this doesn't mean the hype is over; in
fact, he argues, we are going to see much more noise about this
section of the market.
"The hype has hardly begun," he claims. "With handhelds, there has
been a focus on personal business users, but the appeal to that
customer base is over and we are pushing into a new phase, looking
at handhelds in terms of consumer electronics and entertainment.
The numbers in this sector are still ramping up."
Sharp certainly hopes this is the case - the manufacturer, Japan's
leading PDA supplier, is launching a Linux/Java PDA in April that
it is hoping will position Sharp as a major player in handhelds in
the UK.
In product terms, Klein says there are two major technical advances
making PDAs more feasible for greater professional use and as
consumer entertainment devices - better, prolonged power
capabilities and access to faster wireless networks.
Testing the water
General Packet Radio Service (GPRS)
is the technology on which the next generation of mobile data
networking is based. It provides a stepping stone from today's
systems - which are fine for voice, but not robust or fast enough
for mobile data - into the third generation (3G), which will
provide true broadband services at 2Mbps.
These faster networks provide the always-on capability that is
regarded as vital in enhancing mobile data access, as well as
greater bandwidth and improved connection speeds, particularly in
the development of 'push' services, where information is sent out
to mobile devices as an alert or text message rather than users
having to dial a Website.
"One aspect we don't see yet that will be important for consumers
is broadband access," emphasises Klein. "But the content and
applications are coming round now. Until recently, a PDA has been
seen as purely for hobbyists, but now major ISVs are looking
seriously at applications for PDAs and how to extend their existing
software out onto these devices."
Chris Gee, general manager at Ideal Hardware, agrees with Klein.
"There are a lot of PDAs out there, but no one is doing anything
with them," he argues. "Even if they are synchronised with a
desktop machine, it's usually only for e-mail and calendar
functions, which is very limited." Ideal has partnered with Airlan
Data to produce an out-of-the-box handheld system, which includes a
Nokia device with an Orange airtime contract. "The customer just
pays once and can then do anything he or she would do on a
notebook," explains Gee.
The system has not been heavily promoted by Ideal, partly because,
like everyone else in the handheld market, the company is waiting
for faster networks to really drive forward demand. "We have held
off a while because we feel some people are reluctant to buy
handhelds now because they feel GPRS is better and cheaper," says
Gee. Ideal's system runs at 28Mbps, which he claims is "pretty
fast" for wireless, but can be expensive at 20p a minute, plus a
charge of £10 a month.
"Actually getting to this point where we can sell the airtime
contract, hardware and software has been quite difficult," he
admits. "Everyone who has seen the demo of this has been very
impressed with its speed and capability, but we certainly have not
gone to town in pushing it. It's more a case of testing the water,
because this is an emerging market and we don't know which way it
is going to go."
There have been several twists and turns in the path towards
developing a single mobile wireless device that provides voice and
data capabilities. From the phone side, there has been the
development of WAP phones, which so far have failed to set the
world alight, although there are some more optimistic forecasts
about sales - again once 2.5G and 3G networks are more readily
available.
The latest figures from telecoms watchdog Oftel show that WAP
phones are owned by only ten per cent of the UK population,
although this figure has risen from seven per cent in the previous
quarter. In comparison, Oftel says there were just under 44m UK
mobile phone subscribers in September 2001.
From the IT side, the development has been led by manufacturers
like Palm and Compaq, with the battle focused more on operating
systems and on providing synchronisation functionality, so users
can use handhelds as extensions of their desktop machines.
There are one or two other devices that attempt to marry up
corporate computing and wireless connectivity, such as the RIM
Blackberry, which provides always-on access to corporate e-mail and
basic personal information via GPRS. Quite a few organisations have
shown interest in the Blackberry because it provides cost effective
two-way mobile data, but its big drawback is that it doesn't
provide voice communication.
Pumatech is a leading provider of software synchronisation with its
Intellisync technology and is rolling out its Mobile Application
Platform to develop personalised content for mobile devices. The
interesting thing about it is that Pumatech has not tried to second
guess which way the market may go, but has developed the software
for as wide a range of devices as possible, including WAP phones,
mobile phones with SMS, Palm handhelds and pocket PC devices.
Not just a fancy diary
Where does all this development
leave the channel? Sharp's Klein says resellers have to start
thinking about handhelds as more than just standalone bits of
hardware. "They need to see this as a networking opportunity within
the enterprise," he comments. "It's about how to extend what they
already do - but resellers have to be clear on what they have to
offer as part of that."
The basics of this approach would be about providing software,
network configuration and management of portable devices. Keeping
PDAs secure is a particular challenge facing IT managers, but Klein
thinks no one yet knows just how handhelds are going to develop.
"We are interested in the social aspect and how people may end up
using these devices," he argues.
He also warns that more general resellers may find it tough to get
into the market. "We sell mainly through specialist PDA resellers
and it will be a challenge for more general resellers to compete,
because it can be hard to understand some of the technical
aspects," he claims. "Handhelds are complicated."
On the other hand, Prash Vadgama, European sales and marketing
manager at GPS manufacturer Navman, says that while software
development for handhelds is moving along, there is no need to see
the devices as particularly complex. "They are very simple," he
says. "These are just devices with a processor and a screen - so in
our terms, they are viewers."
To date, reveals Vadgama, most content for handhelds has been
pretty basic. Not surprisingly, he sees mapping and location
information as the foundation for far more interesting and useful
applications. "We want these devices to be used for more than one
simple application," he comments. "People can use mapping data and
location guidance as an asset. The next stage will be to look at
two-way communication devices."
As well as the four existing UK mobile network operators, there are
other networking technologies around that can enhance the use of
handhelds. Packet-switched wireless data networks, such as
Transcomm's Mobitex, provide real-time wireless links between
remote users and a central network. These networks do not, however,
provide voice communication and are better suited for short,
frequent data transmissions, rather than transferring large volumes
of data.
Vadgama says the use of handhelds as two-way communication devices
with more complex applications will boost the market. One obvious
focus is the public sector, particularly the emergency services.
Many police forces and ambulance services are already trialling
remote devices supposed to provide them with accurate location
information, enabling them to reach emergency situations more
quickly and feed back information to a control centre or emergency
room. "If you see a handheld as a fancy diary, there is probably
not much of a market," Vadgama claims. "But viewed from the correct
perspective, there is a market." He adds there are many channel
opportunities. "There's installation, training, maintenance and
upgrade," he suggests. "This is a genuine business model with a
genuine role for the reseller."
Navman software runs on both Palm and Pocket PC platforms. In the
UK, the company works through distributor Computer 2000 for
broad-based consumer sales and A2000 for more specialised sales.
"With A2000's niche experience in wireless mobile communication
channels and C2000's extensive full sales experience, we are
confident that resellers will be fully supported and therefore able
to maximise the true market potential for GPS technology," claims
Vadgama.
Tough competition
Companies like Navman are banking on
the fact that bespoke software development will play a big role in
the growth of handheld sectors as companies realise the potential
for cross-referencing data and mapping information. "I'd guess the
profit on an iPAQ is at best ten per cent, but margins for
resellers selling whole systems is more like 25 per cent - and
we're not talking 25 per cent on a mouse," Vadgama says. "These are
reasonably priced systems."
In fact, the pricing of handhelds was causing concern towards the
end of last year. Hardware prices had fallen. By September, there
was a glut of products available, particularly at the less
expensive end of the market, leading to fears that manufacturers
were failing to capture buyers.
Palm replaced its earlier m100 and m105 models with the new
entry-level m125 in autumn 2001 at a retail price of £169. At the
high end of the market, Palm now has the m515, which competes with
Sony's CLIE devices - which also run the Palm operating system -
while both companies are competing with an increasing number of
handhelds from various manufacturers, including HP, Compaq, Casio,
Toshiba, NEC and Fujitsu Siemens.
Market research firm Canalys says that in the final quarter of
2001, shipments of mobile devices in Europe were down 19 per cent
on the final quarter of 2000, from 1,086,891 to 884,885 units,
despite a rise in sales of 12 per cent for the year as a
whole.
With growing competition in the market between hardware
manufacturers, prices are still being pushed down.
Further information:
www.canalys.comwww.ideal.co.ukwww.navman.comwww.sharp.co.uk