On the Road Again?

PDAs and Mobile PCs

Assistant to Go

There's been a lot written about the certain demise of PDAs, speculation fueled by Sony's decision to forego any additional launches of its innovative CliƩ model. But the category actually began to turn around in 2004, with some projections calling for modest growth of about 2 percent after more than two years of declines. Ironically, although Sony shipped enough units earlier this year to become the third-largest provider in the U.S. market, it is focusing future R&D efforts instead on its joint smartphone venture with Ericsson.

"Although I believe that the smartphone will become the dominant handheld, there will always be a market for nonconnected PDAs," says Gerry Purdy, principal analyst with Cupertino, California-based MobileTrax, which advises clients on mobile and wireless computing. "It's just that the PDA will be relegated to the shelf next to the low-cost calculator in the supermarket."

Kort estimates that roughly 11.9 million PDAs will ship by the end of 2004, with units based on Palm operating systems accounting for about half that number. The BlackBerry device from Research in Motion is becoming a contender for the No. 2 spot, with estimated shipments of 2.2 million units in 2004, about triple what it shipped the previous year. But Hewlett-Packard has been posting the strongest increases among the top five handheld vendors. Analysts have said Dell hasn't made as many waves as expected; however, its new Axim x30, priced at $249 and with integrated support for Wi-Fi, is seen as a step forward in innovation for the vendor.

Features that have become basic checklist items for PDAs include color screens, preferably with transflective qualities that make them easier to use in outdoor lighting, and faster chips that let users easily access more than one application at once. GPS is also available for PalmOne and Pocket PC devices. What all this enables is the other big trend that will shape the PDA market: specialization. Says Burden, "People want a device that is appropriate for the task, not excessive for the task."

Take Note

If wireless was the word for notebooks for 2004, then ruggedness is an emerging theme for 2005. As the category matures-by some estimates, mobile PCs will account for 1 in 3 of all PCs sold by 2006-design innovation has moved inside the box. Buyers can expect 15-inch screens to become fairly standard in coming months, and the pricing threshold will continue to hover around $1,300 for entry-level products, although fully loaded models can easily cost double that. The decision by some larger notebook makers to use chips from AMD instead of Intel for some models should keep prices in check. AMD delivered a series of mobile processors in July, including a speedy 64-bit edition being incorporated into notebooks from Alienware and Epson America, not to mention the C3500 ultraportable convertible tablet/notebook models from Averatec, priced starting at $1,300. The AMD processors have been optimized for extended battery life and are compatible with many widely used wireless technologies.

"There isn't much difference between mainstream notebooks," says Ranjit Atwal, senior analyst with Gartner in London. "The innovation is further down into the PC rather than in terms of features missing."

IBM, for example, has introduced a feature that senses if the notebook is being moved and locks down the hard drive, thus reducing the chance of failures. If you do have a problem on the road, IBM introduced a feature this year called Rescue and Recovery that's embedded into some of its ThinkPad models, including the ThinkPad X40, its 2.7-pound ultraportable. The service lets you restore your system quickly if you are hit by a virus or encounter corrupted software drivers.

It used to be that you had to skimp on weight and functionality if you wanted a rugged notebook-and pay about a 20 percent markup over mainstream prices. But Panasonic's Toughbook W2, for example, is a 2.8-pound ultraportable outfitted with all the latest technologies, such as the Intel Centrino wireless architecture supporting 802.11b+g, a DVD-ROM/CD-RW drive, a shock-mounted hard drive that can be removed to protect sensitive information, rubber-gasket-sealed ports to keep foreign matter out of the notebook's innards, and a 12.1-inch active-matrix display.

"It all comes back to usage," Atwal says. "We can't generalize usage of the notebook; there will be vendors who will specialize in particular niches of the market."

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This article was originally published in the November 2004 print edition of Entrepreneur with the headline: On the Road Again?.

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