Will PDAs Become a Historical Footnote?

PDA designs improved, screens got better, storage expanded and devicesgot faster. Despite some promise, though, the PDA market never hasseemed to reach its potential. In fact, those who detest the technologyprobably outnumber the people who love their PDAs. A few years from now,we might reflect on the PDA and wonder aloud why marketing managers everthought it would succeed.

Recent news does not necessarily signal the end of the PDA, but itcertainly isn't very encouraging. Last week's one-two punch of marketreports by IDC and Dataquest sent a clear message: The PDA is not aliveand well. IDC estimated the worldwide market for PDAs had declined bynearly 18 percent in 2003, down to 10.4 million units. Gartner's numbersweren't quite as bleak. It pegged the annual decline at 5.3 percent.With over 10 million units, there's still some money to be made, butdemand is soft from the low-end consumer market through the high-endenterprise market.

The problem lies largely in functionality. Over 10 years into theproduct development cycle, the vast majority of today's PDAs areglorified personal organizers rather than the communicators Appleoriginally had envisioned. Fewer and fewer people seem inclined to shellout the time and money to maintain a PDA.

Many users have turned to a new generation of ultra-portable notebookcomputers. While these devices aren't nearly as convenient as a handheldPDA, they offer much greater functionality when you're away from theoffice. Many have tried, but very few mobile professionals were everable to wean themselves from their notebooks in favor of PDAs. Oh sure,they might carry their PDA to business meetings--maybe even use it tocheck e-mail over a wireless network. But tucked somewhere safely in abriefcase or travel-bag was their notebook, ready to take on thecomputing and communications needs from the relative comfort of thehotel room.

Another threat came from the so-called purpose-built device, the mostpopular manifestation of which has been the RIM Blackberry. While thePDA market was declining in 2003, RIM managed to increase its shipmentsby 121 percent, according to IDC, refuting the contention that the PDAsales decline is related to an overall economic slowdown. Instead, RIMdemonstrated that when you optimize a device design to support aspecific task, you can achieve considerable success. Although theremight be some argument, the clear market perception is that RIM doesmobile e-mail better than anyone else.Ironically, RIM's success also may portend some future challenges forthe company as smartphones begin to encroach on its market turf. To itscredit, RIM seems to understand the smartphone threat and has begun tolicense its messaging technologies to other handheld device vendors,including PalmSource and Samsung. While RIM has enjoyed some success byintegrating cellular telephony features into its platform, it's not easyto compete with phone manufacturers that have made their livelihood bydelivering on the needs of the mass cell phone market.

Debate will continue for many years about whether it is best to havemultiple mobile devices, each optimized for a specific task, or a singlemobile device that performs all tasks well enough. However, when youconsider the broad range of consumer and business applications, rangingfrom entertainment to messaging to mission-critical enterpriseapplications, it's tough not to conclude that some level of deviceconsolidation makes sense. Based on that assumption, we see a brightfuture for the smartphone and more limited success for purpose-builtdevices, but not much of a future for the classic PDA.

-- Dave Molta, [email protected]

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