IT directors pull plugs on PDAs

European IT directors are reluctant to spend on personal digital assistants (PDAs), and sales of the devices are stagnating,...

European IT directors are reluctant to spend on personal digital assistants (PDAs), and sales of the devices are stagnating, according to separate reports from market research companies Dataquest and IDC.

Second-quarter shipments of PDAs and PDA-phone devices in Western Europe were down on the previous quarter and on last year, the reports said.

IDC reported a 21% year-on-year decrease and no improvement on the previous quarter in shipments of PDAs and converged wireless devices, while Dataquest saw shipments of PDAs drop 18% year on year, and 26% on the previous quarter.

Dataquest excludes PDAs such as Handspring's wireless-enabled Treo models from its figures because it considers them to be too voice-centric. IDC includes them and also shipments of converged devices such as Nokia's 7650, a mobile phone with digital camera, address book and calendar functions.

Andy Brown, research manager for mobile computing at IDC, said that however you define the market, the decline in shipments of PDAs and converged devices is, in part, down to corporate buyers' reluctance to open their cheque books.

"They don't have the budget, and they're not willing to invest in projects with risky assets," Brown said.

Manufacturers have tried to tempt corporate buyers with new features and models, but with little success, according to analyst Roberta Cozza of Dataquest.

"PDA manufacturers have been stuck in a product approach rather than a solution approach. They really need to educate the sales channel on the benefits that mobile workers can get from these devices," she said.

Compaq, with its iPaq PDAs, was the only company to see this, Cozza said. "Compaq is the only vendor that had a corporate focus from the very beginning."

According to IDC's Brown, Palm was addressing the problem with its agreement to work with IBM, which was announced earlier this week. "Palm knows it can't do corporate applications very well," Brown said. "This has been a tough nut to crack for most of the vendors."

Cozza agreed, but warned that corporate buyers still care about hardware too. "It's a good move, but it needs to be coupled with improvements on the product side," she said.

Palm will have to manage delivery of its product improvements carefully, she said.

The company's sales were hit last year as customers waited for the introduction of new models. The arrival of a new version of its operating system later this year is having the same dampening effect on sales, she said.

Following its acquisition of Compaq, HP is now the market leader in Western Europe, just ahead of Palm, IDC and Dataquest said.

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