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Smartphones will kill off PDAs – IDC

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By the end of this year, the plain, vanilla PDA market will have shrunk by nearly ten per cent. Instead, users are demanding "converged" devices, says a survey by research company IDC. And at last, the market seems to be getting the design right.

The shrinking of the PDA business isn't a new trend, either. It will come as small surprise to anybody working with mobile devices, but the figures show that PDAs without voice capabilities sold less this year than last year by 8.4 per cent - the second year in a row that sales have dropped substantially.

IDC's analysis: "From mobile phones to converged mobile devices, which combine the data capabilities of PDAs with the voice communication capabilities of mobile phones, competing device types will draw buyers away from traditional handheld devices."

The mainspring of the new smartphone market is still not Microsoft; neither its Windows Mobile, nor its Smartphone products appear in the IDC report. Rather, the survey says, the surge will come from Symbian-based devices.

"The converged mobile device market will see its strongest year of growth in 2003 as a number of new Symbian OS-powered devices push worldwide shipment totals beyond 13 million units," says the report - without giving away whether it expects this growth to last.

Hinting that this may be a flash in the pan, the report says: "Limited growth is expected to return in 2004, to the unconnected PDA market," but adds that even with the recovery, sales will be far below what people expected: "Dreams of a 20 million unit-a-year market will be replaced by a less than 15 million unit-a-year reality."

Companies looking to capitalise on the shift to "voice and text" based devices include Dell, Handspring, Hewlett-Packard, Palm, and Research-In-Motion, who will be moving to "converged mobile device" production.

IDC's mobile research team manager, Ken Burden, says the market for smartphones has been handicapped by poor design. Actually, he doesn't put it quite so tactlessly, but he insists that the main reason for the switch is that new generation smartphones are better designed, which is much the same thing:

"As device aesthetics and functionality improve and end-user prices continue to decline, converged mobile devices are becoming increasingly accessible to the mainstream consumer and are expected to ship in greater numbers than traditional handheld devices for the first time in 2003."

Without reading the entire report, it's possible to be wrong about this - but it looks like there's not a whole lot in it beyond some current market data, or, as IDC puts it, "the market realities of 2002 and 2003." Valuable though this is, it's no substitute for what many device makers will really want - an insight into where to go.

The normal way of dressing up dull market data is to offer some vague advice about how to cope with market changes. The "key finding" offered here is obscure, to put it gently: "To achieve legitimate success, it's essential that hardware-centric vendors implement plans to move from hardware revenue dependency to a safer, more balanced strategy of technology licensing, solutions selling, or service provisioning."

If that sounds like a really good idea to you, you might want to buy Worldwide Smart Handheld Devices Forecast and Analysis, 2003-2007 (IDC #29586).

Supposedly, as well as current market share figures, the report also has forecasts for "all form factors, including splits by operating systems, price band and geographic region through 2007." ®

Copyright © 2003, NewsWireless.net

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