PocketPCs rumoured dead

The PocketPC market is dead, one prominent hardware vendor has claimed.

Mark Whittard, national marketing manager at Toshiba Australia, spoke to a recent press conference on the direction of the PC market. He said sales of PocketPC-type handhelds - after a fabulous start last year prompting optimistic projections for the next five years as high as 40 percent - could be considered deceased.

'The PocketPC market is pretty much dead, and HP will tell you the same if you talk to them. They will give you a realistic view,' he told news media, in response to a question about the future of the PDA market.

Toshiba is one of the major vendors of PocketPCs in Australia, offering some 26 models to business, home and education verticals.

Whittard said that PDAs in general had suffered from a lot of hype. Although the consumer space had seen demand, corporates had not found handheld devices so useful. 'A lot of it is performance-based. You can only do so much with a PDA if you really want to manipulate data,' he said.

Vertical market applications for the devices tended to be somewhat niche, he added, with some companies finding PDAs useful as barcode-reading stocktake devices and real estate companies using them to record data and take pictures of available properties.

'There are a number of sales automation and field automation products, but they are few and far between. At the end of the day, their capacity, screen size and functionality limit them,' Whittard said.

He pointed out that smart-phones could do a lot of the same things as PocketPCs - with the added benefit of phone functionality. As a result, Nokia and Siemens were expected to take the lead from Palm, HP and Toshiba by September 2004. 'We really see demand in devices with both voice and data capability. [They] have really taken off in the last two quarters of this year,' Whittard said.

Some industry players and commentators disagreed with Whittard's view.

Lillian Tay, principal analyst for hardware and systems for the Asia-Pacific at Gartner, said the market for PocketPCs was not dead, but its focus had changed. The refresh of the PocketPC product line had come quite late with Windows Mobile 2003 - providing added functionality that customers were demanding - only shipped in June, she said.

Gartner was anticipating a global PDA market decline of 5.1 percent in 2003, representing sales of 11.5 million units. But for 2004, the research firm was 'more positive' and had forecast 'solid growth' of 5.9 percent globally to 12.1 million units, Tay said.

'We're anticipating by the end of the year a new release of the PocketPC phone edition from Microsoft, and that will actually refresh a wide range of wireless PDAs, which means there is potential for PocketPCs from the wireless space,' she added. 'People start to get more excited when you talk about wireless PDAs.'

Tay said Gartner research suggested that Toshiba, Dell and HP were the top three global vendors of PocketPCs. 'We see HP as still very dominant in PocketPCs.'

Toshiba's global PDA unit shipments for the first half of 2003 grew 32 percent over the first half last year, Tay said. The growth came from a low base as Toshiba only 'aggressively' grew the market from the second quarter of 2002. 'Toshiba's shipments peaked in Q4 2002 and it has been suffering quarterly shipment declines in Q1 and Q2 of 2003.'

However, Toshiba's results compared well with the overall global market for PocketPCs incorporating WindowsCE, which Tay said also experienced 32 percent growth this first half over last year's first half.

Julianne Bean, product manager for the iPAQ range of PocketPC handhelds at HP, said the PocketPC market was certainly not dead. However, she suggested that companies who failed to address a rise in consumer demand for handhelds were likely to fall by the wayside. HP's belief followed recent IDC analysis implying the market had swung towards low-end consumer-focused devices, she said.

'The PocketPC market is changing quite dramatically and HP is in a really good position,' Bean claimed. 'Because we're really seeing our [RRP] $499 product doing big things.'

High-end PocketPCs were not 'necessarily' doing badly but HP had certainly seen an increase in demand for low-end iPAQs, Bean said. Release of the new Microsoft Windows Mobile 2003 operating system was expected to lift sales, especially as hotspot use increased, she said.

HP was still predicting an average 10 percent growth year on year for iPAQs overall unless the market focus changed again soon, she said. 'We're looking at some growth at this stage for the whole market,' Bean said. 'We've seen an increase particularly in the retail space, [with HP] actually taking over number one position last month.'

HP now sold 50 percent via the channel and 50 percent retail, according to Bean.

Fleur Doidge attended the Face the IT Media Forum in Queensland as a guest of MediaConnect.