Farewell PDA?

Is this the beginning of the end for the conventional handheld computer market?

It certainly looks that way. Last week the research organisation IDC reported that sales of PDAs and other pocket-sized computing devices not including telephone technology have now fallen for three quarters in a row. (You can read more about this in our story on page 19.)

According to IDC, unit sales have dropped 8.7% to 2.1 million units over the past year.

Nothing illustrates what’s happening to the PDA market better than the news that PalmOne’s non-telephone handheld shipments have fallen by 20% in the last quarter. That’s not a decline, it’s a collapse.

Sony withdrew from the handheld computer market outside of Japan earlier this year. This was a serious blow for PalmOne. Many reviewers believed the company’s Clie-branded handhelds were the best non-telephone devices designed around PalmOne’s technology.

Toshiba and Sharp have both recently announced that they will no longer be selling PDAs in many markets around the world.

In other words, some of the world’s best known and most successful consumer electronics companies have decided the PDA game is over.

The news that PDA sales are falling shouldn’t surprise anybody who’s tried to use them. They look technically impressive until you want to do something more than make an appointment for next Thursday or enter someone’s contact details.

Pen input is still frustrating. PDAs are not quite read-only devices, but they are a struggle to use once you move beyond ticking items on a list.

Handheld functionality falls far short of even modest Windows systems. While devices designed around Microsoft’s Pocket PC technology come with built-in applications based on parts of Microsoft’s Office suite, the individual programs are only shadows of their counterparts.

Pocket Word and Pocket Excel have difficulty dealing with documents created on the desktop and are only practical for very simple work. The Pocket PC email, contact and calendar tools are feeble and clumsy compared to Outlook.

Handheld computers might be great for delivering presentations in theory, but there’s no Pocket PC version of PowerPoint, so you have to use a third party application.

On top of these shortcomings, handheld computers are ridiculously expensive when compared with broadly similar technology.

A typical non-phone PDA costs somewhere between $800 and $1500. That kind of money buys a lot of desktop computer. These days you can even buy an acceptable entry-level notebook for less than $1500.

Perhaps that’s not a fair comparison. So try this: Nintendo’s Gameboy Advance retails for about $160 — that’s between ten and 20% of the asking price for a PDA, for about 90% of the functionality.

Apple’s top-of-the line iPod Photo delivers a whopping 40GB of storage and a huge amount of multimedia functionality for $850.

You could argue a PDA is a versatile device with the ability to play games like the Gameboy or play music and dish up digital images like the iPod Photo. But while this may be true, the PDA doesn’t do either task half as well as the specialist hardware.

Moreover, game playing and portable music are killer applications in a way that electronic calendars and address books are not.

Of course, the ultimate killer applications for a piece of pocket-sized hardware are voice and text communications. These are functions that can be handled perfectly well by the cheapest mobile phones. And even modest phones can store contacts and calendar reminders.

Mobile phone ownership is now at — or pretty close to — saturation point in New Zealand and many other rich countries. Phone makers are looking to revive sales by adding features to their handsets. Camera phones, handsets with built-in MP3 players and mobile gaming hardware are now commonplace. So are smartphones, which combine voice, email and browsing with PDA functionality. And then there’s the Blackberry.

Traditional PDAs probably won’t die out anytime soon. They will live on in a few niche vertical markets and, maybe, as low-end commodity devices. However, it certainly looks as if their glory days are over.

Which is a mighty long way from the “trillion dollar market within ten years” predicted by Apple CEO John Scully when he launched the ill-fated Newton — the world’s first PDA — back in 1993. But then, we all knew he was a dill, didn’t we?

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