In Depth: Smart phones emerge as the next-generation PDA

The array of new digital communications products set to hit the market is staggering. Pick any computer hardware product and any telephone device, combine them, and you have a product strategy for the late '90s -- at least, that's what some vendors seem to think.

The new breed of product that arises from this strategy has been dubbed the smart phone, or the personal communications device, and is designed to combine the features of mobile telephony, palmtop computing and Internet access. Smart phones differ from the current crop of personal digital assistants (PDAs) by offering wireless telephone communications.

Nokia Communications of Finland is leading the march on the market with its 9000 Communicator, a mobile telephone with e-mail, voice, and World Wide Web browsing capabilities that's due in August.

Hot on the heals of Nokia are companies such as Sony of Japan, Sweden's Ericcson, and Motorola, which also plan to have smart phones on the market by the end of the year.

Motorola's product, called the Multiple Application Phone (MAP), will be designed to let users send and receive faxes and email and have access to the Internet.

Meanwhile, Philips is planning a mobile screen phone, while the U.K.'s Acorn Computer is developing NewsPad, a roving version of the network computer paradigm that has been the talk of the industry for the past half-year.

The form of this new breed of product depends on whether the vendor comes from the telecom industry, in which case it will look like a mobile phone, or from the computer industry, in which case it will resemble current PDAs.

The question of form is on the minds of potential users. "Should we take a US$10 mobile telephone and add a US$300 palmtop computer?" says Mike Dennehy, marketing director at Citibank in London. "Or should we take palmtop computer and connect it to a mobile telephone?"

Compaq chief executive and president Eckhard Pfeiffer believes in the latter route and has revived his company's canceled PDA project. Pfeiffer is adamant that the next-generation PDA needs to be "a product that will allow you to access your desktop PC and company network while you are on the road," he says.

Michael Dell, chairman and chief executive of Dell Computer, agrees. "How do you access the same data that is on your corporate network?" he asks. "If you can't get it, it's an island."

Dell argues for adding a telephone with GSM (Global System for Mobile Communications) capabilities to a laptop computer.

In spite of some intriguing entries, the PDA arena has yet to generate much excitement. Over the past couple of years, only Sharp of Japan, Hewlett-Packard and the tiny British company Psion have had any success, according to analysts. Psion, for example, has sold about 1 million PDAs.

Apple, meanwhile, is still trying to entice customers to its Newton, a public relations nightmare that has been hampered by poor handwriting recognition and the inability to transfer data between PDAs and PCs.

Smart phones may not fare any better than most PDAs. Industry insiders say it's safe to assume the general public will not be breaking down the doors of consumer electronics stores to buy US$1500 mobile telephone organisers and that the early adopters will be corporate customers. But to succeed in this market, vendors will have to offer a product that will enable users to pick up email, access their corporate network, and carry out a limited amount of transaction processing at an affordable price.

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