This was a watershed year for the handheld computing business. Not only did a sales slump continue, but pioneer and longtime sector leader Palm saw its edge against Microsoft begin to seriously slip away. For the first time, the dollar value of handhelds running Microsoft's Windows CE operating system has exceeded Palm OS-powered device sales.
Palm OS-based systems still represent 49 percent of units shipped worldwide. But a large number of those are low-end consumer models like the Zire. Meanwhile, Windows-based PDAs dominated the category of powerful-and costly-business-oriented devices with features like built-in wireless networking and the ability to operate as full-featured cell phones.
As yet, however, the success of pricey PDA/cell phones using the new Windows Smartphone operating system is not assured. "We're seeing a lot of people rolling things out," says King. "Not a whole lot of people are buying $500 and $600 phones."
Palm's newest Tungsten T3 could suffer the same fate. It's aimed squarely at mobile entrepreneurs, with features such as a dazzling high-resolution screen, but requires you to have a compatible cell phone equipped for Bluetooth short-range wireless networking to get wireless Internet and e-mail access. At $429, it's about twice as expensive as the new Palm Tungsten E ($199), which has a lower-resolution screen and dispenses with Bluetooth connectivity.
Toshiba's latest Windows-based PDAs are pricey and sophisticated but don't try to be cell phones as well. The $449 Pocket PC e750/e755 series has a 400MHz processor and a spacious 96MB of memory as well as built-in Wi-Fi and Microsoft's latest handheld operating system, Windows Mobile, with enhanced wireless networking features. The $249 to $299 Pocket PC
e350/e355 series skips Wi-Fi and has a 300MHz chip, 64MB of memory, and the older Microsoft Pocket PC software.
Dell entered the PDA market last year with a splash and recently introduced its second handheld. The Axim X3 is a Windows Mobile-based, 400MHz, 64MB model with built-in Wi-Fi networking that's slimmer and lighter than the original Axim X5 and priced at $349.
Mobile Wireless Networks
All the memory and processing power in the world won't do a mobile entrepreneur much good unless he or she is connected to other sources of business information while on the go. For most of them, that means being able to hook into the computer system back at the office.
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"For an entrepreneur, there is only one killer app," says Charles Golvin, a senior analyst with Forrester Research Inc. in San Francisco. "That's getting back to your corporate network." Only by connecting to their company's computers can mobile entrepreneurs get sales figures, check customer orders, collaborate on presentations with colleagues, and perform other jobs that are essential.
For entrepreneurs to be able to reliably, conveniently and speedily connect to their corporate data from anywhere, mobile wireless networks are the answer. With the spread of higher-speed wide-area networks built by cellular phone companies and localized Wi-Fi hot spots, those networks are beginning to take shape. After all, Wi-Fi hot spots-found in public places like Starbucks and airport lounges, where you can get high-speed wireless connections to the Internet-grew from fewer than 15,000 nationwide locations last year to more than 70,000 this year, says Gartner. And according to leading hot-spot provider Wayport Inc. of Austin, Texas, the number of people using its public Wi-Fi installations is growing at a similarly explosive 20 percent per month.
"Realistically, we're starting to be able to use wireless connectivity," says King. Packet data adjuncts to digital cell phone networks, going by acronyms such as GPRS and CDMA 1XRTT, offer effective data transmission speeds of 40 to 60Kbps for laptop- and PDA-toting mobile workers.
That's fast enough for e-mail-even with attachments. And packet data networks are pervasive enough in major metropolitan areas and along America's major highways that entrepreneurs are reasonably assured of being able to hook into a wireless network wherever they may roam.
Packet data use is pricey but continues to tumble along with the rest of the cost of mobile information technology. Today, you can get unlimited use of a network such as Verizon Wireless' Express Network wireless Internet plan for $80 per month in some service areas. Analysts say flat-rate pricing may be the lever that springs loose heavy wireless Internet demand for many business users.
Even the best-case data transmission speeds of 144Kbps by wireless Internet services such as Verizon's are still just a fraction of the throughput delivered by land-line connections such as cable, DSL and T1. For heavier lifting-Internet browsing, running mobile applications and transmitting large file attachments-mobile entrepreneurs should turn to Wi-Fi hot spots. Public Wi-Fi network sites offer more reliable transmission rates 50 to 100 times the speed of wireless packet data networks.
Public hot spots are limited to airport lounges and hotels, coffee shops and restaurants for the most part, with active zones up to 300 feet from the transceivers. But the current 70,000 or so Wi-Fi hot spots are expected to double in 2004 and keep growing from there, suggesting that Wi-Fi public access will be, if not ubiquitous, at least widely available in urban locales. T-Mobile alone, which partnered with Starbucks and Borders to put hot spots in coffeehouses and bookstores, has nearly 2,800 sites in 33 states, from Hawaii to Maine.
Mobile businesspeople are embracing existing hot spots at impressive rates. "We have over 200,000 people using our service," says Dan Lowden, vice president of marketing for Wayport, which operates approximately 700 hot spots. "And it's growing on average about 20 percent a month."
Pricing remains an issue for hot-spot users. Many hotels charge $10 each time a user connects to the Internet via a wireless hot spot. Airports charge about $7. Fees for a subscription that lets you roam among a network like Wayport's can range from $30 to $50 per month. Until prices slide, many cost-conscious entrepreneurs are likely to limit connections to those occasions when they have urgent and important information needs. Naturally, when it's a matter of closing a sale or not, those rates are not serious obstacles, notes Golvin. "This equation can work for a lot of people," he says.
Another obstacle is usability. The field of mobile data access is populated by many vendors and standards. When it works, it can work well. When problems arise in using or configuring mobile networking, untangling them can be difficult. "One thing you still don't have is real simplicity and ease of use," says Golvin. "We're not at the point where your average Joe can make things work out of the box."
For that reason, in addition to pricing, customer service is seen as key to not only boosting the use of mobile networking, but also to deciding which of the many providers will survive and prosper. About 20,000 people call Wayport's help desk each month. "It's very easy if you're set up right from the get-go," says Lowden. "But about 10 percent of the people who connect to our service have to call in."