Dell PDAs to hit the market in two weeks

Pricing sweet spot

Dell says it will begin selling handheld devices in mid-November, as long-time PDA makers like Palm and HP wait for the onslaught.

The official unveiling of the company's line of PDAs (personal digital assistants) will come at the Comdex event in Las Vegas on 18 November. Dell said it will begin taking orders from the launch date for its Axim X5 handheld devices, which run on Microsoft's Pocket PC operating system.

Dell has not released a full set of specifications for the new Pocket PCs, but early reports say the high-end Axim X5 will sell for around USD299 and will have a 400MHz Intel StrongArm processor with 64MB of SDRAM. The lower-end unit will go for about USD199 and it comes loaded with a 300MHz StrongArm processor and 32MB of RAM.

Both models have Compact Flash 2 and Secure Digital expansion slots, through which extra memory or wireless connectivity can be added. Dell has also said that in a year's time it hopes to roll out Pocket PCs that will come with integrated Bluetooth or Wi-Fi connectivity.

The news was widely expected, and it comes after Dell announced plans to introduce its own line of printers manufactured by Lexmark, to the dismay of printing giant Hewlett-Packard. As with the printer announcement, Dell's move into the PDA segment could threaten the market position of the industry's leaders, namely Palm and HP. Dell currently sells PDAs made by Palm, Sony, NEC and Casio.

According to the most recent figures from research company IDC, covering the three-month period to June 2002, Palm remains the number one PDA maker globally, controlling about a third of the market. Its operating system, Palm OS, is even more dominant with an almost three-quarters share of the market. The number two device maker is HP, following its merger with Compaq, with an almost 17 percent market share.

Experts are now saying that Dell's well-documented ability to produce, distribute and market products at low prices could cut into the dominance of Palm. "They are really going to shake up the industry," said Andy Brown, IDC's EMEA research manager for mobile computing. "It's going to be really interesting to see what happens."

Brown said that Dell's commoditised approach to selling products, and the incredibly low prices that come with that approach, will be closely watched by other vendors. He predicted that the company would target business users primarily and that a launch in Europe would probably not come until next year.

"They are coming in at that really sweet spot in terms of pricing -- somewhere between $199 and $299," Brown added. "But they are not the only ones doing this. With low cost of memory and relatively low cost of screens, lots of new manufacturers in Asia are starting to pop up... These low-cost devices are likely to spur the market," he said. According to IDC figures, worldwide handheld device shipments declined 9.3 percent from 2.89 million units in Q2 2001 to 2.62 million units in Q2 2002.

Brown warned, however, that Dell's main roadblock in its PDA ambitions could come from the fact that it has no bricks-and-mortar retail operations, where the bulk of consumer and business PDA purchases are made. He also questioned whether the company would be able to provide warranty and business support for the PDAs it sells, since it lacks this physical presence.


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