Thursday, April 29, 2004

Palm Preps New Devices as PDA Market Plunges

Palm Preps New Devices as PDA Market Plunges "Tomorrow, palmOne will unveil two new consumer-oriented PDA devices in a bid to continue its recent track record of releasing innovative, hip high-tech accessories. Unfortunately, palmOne's offerings will debut on the heels of one of the worst quarters in PDA history. Despite two consecutive quarters of sales growth in late 2003, PDA sales fell almost 12 percent in first quarter 2004, year over year, to 2.2 million units.
palmOne's Palm OS-based devices retained the top spot last quarter, with 39.4 percent of the market. HP, which sells devices based on the Microsoft platform, was number two with 24.7 percent of the market. Sony, a Palm OS licensee, was number three with 9.3 percent. Dell and Toshiba, two Microsoft licensees, rounded out the top five with 7 percent and 2.2 percent of the market, respectively.
A few years ago, these numbers seemed a bit more important. But it's increasingly obvious that the PDA market is on the wane as consumers and knowledge workers move to more sophisticated multipurpose devices such as smart phones and Tablet PCs. Although palmOne still holds the number-one spot in its market, an obvious question arises: With the recent popularity of multifunction cell phones and smart phones and the rise of Tablet PCs on the high end, do traditional PDAs still offer unique value?
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The Tablet PC--a step up from the PDA--is poised to explode, however. Tablet PCs got off to a slow start in 2002 but recent changes to the underlying platform--thanks to the Intel Centrino mobile technology--have dramatically enhanced the devices' battery life and processing power. And a free OS update, due in late June, will improve the Tablet PC's handwriting integration. The Tablet PC market is one area in which Microsoft will no doubt dominate but it's also a traditional PC market in which the software maker has obvious advantages. And if the Tablet PC is successful, its functionality will become the prototype for all mobile PCs."
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