PDA - item in CW360 repost

["Dr John Tankard" <john@xxxxxxx>]

Spotted this in CW360, sorry for the long post but the link will not
work for non subscribers

John



There have been major shifts in the market for mobile devices. The
convergence of handheld devices and wireless phones has produced a more
competitive market, in which IT vendors, electronics suppliers and
mobile phone manufacturers are all fighting.

One of the signs of change came in July 2001, when Psion pulled out of
the market. There was a great deal of hype surrounding handhelds in 2000 - in 2001, that changed as the market began to consolidate. This year,
further consolidation and convergence are going to be the hallmarks as
personal digital assistants (PDAs) get closer to mobile phones. But Mark Klein, product marketing manager of handhelds at Sharp, says this
doesn't mean the hype is over; in fact, he argues, we are going to see
much more noise about this section of the market.

"The hype has hardly begun," he claims. "With handhelds, the= re has been
a focus on personal business users, but the appeal to that customer base is over and we are pushing into a new phase, looking at handhelds in
terms of consumer electronics and entertainment. The numbers in this
sector are still ramping up."

Sharp certainly hopes this is the case - the manufacturer, Japan's
leading PDA supplier, is launching a Linux/Java PDA in April that it is
hoping will position Sharp as a major player in handhelds in the UK.

In product terms, Klein says there are two major technical advances
making PDAs more feasible for greater professional use and as consumer
entertainment devices - better, prolonged power capabilities and access
to faster wireless networks.

Testing the water
General Packet Radio Service (GPRS) is the technology on which the next
generation of mobile data networking is based. It provides a stepping
stone from today's systems - which are fine for voice, but not robust or fast enough for mobile data - into the third generation (3G), which will provide true broadband services at 2Mbps.

These faster networks provide the always-on capability that is regarded
as vital in enhancing mobile data access, as well as greater bandwidth
and improved connection speeds, particularly in the development of
'push' services, where information is sent out to mobile devices as an
alert or text message rather than users having to dial a Website.

"One aspect we don't see yet that will be important for consumers is broadband access," emphasises Klein. "But the content and applica= tions
are coming round now. Until recently, a PDA has been seen as purely for
hobbyists, but now major ISVs are looking seriously at applications for
PDAs and how to extend their existing software out onto these devices."= ;

Chris Gee, general manager at Ideal Hardware, agrees with Klein. "Ther= e
are a lot of PDAs out there, but no one is doing anything with them," = he
argues. "Even if they are synchronised with a desktop machine, it's usually only for e-mail and calendar functions, which is very limited."= ;
Ideal has partnered with Airlan Data to produce an out-of-the-box
handheld system, which includes a Nokia device with an Orange airtime
contract. "The customer just pays once and can then do anything he or<= BR> she would do on a notebook," explains Gee.

The system has not been heavily promoted by Ideal, partly because, like
everyone else in the handheld market, the company is waiting for faster
networks to really drive forward demand. "We have held off a while
because we feel some people are reluctant to buy handhelds now because
they feel GPRS is better and cheaper," says Gee. Ideal's system runs a= t
28Mbps, which he claims is "pretty fast" for wireless, but can be=
expensive at 20p a minute, plus a charge of =A310 a month.

"Actually getting to this point where we can sell the airtime contract= ,
hardware and software has been quite difficult," he admits. "Ever= yone
who has seen the demo of this has been very impressed with its speed and capability, but we certainly have not gone to town in pushing it. It's
more a case of testing the water, because this is an emerging market and we don't know which way it is going to go."

There have been several twists and turns in the path towards developing
a single mobile wireless device that provides voice and data
capabilities. From the phone side, there has been the development of WAP phones, which so far have failed to set the world alight, although there are some more optimistic forecasts about sales - again once 2.5G and 3G
networks are more readily available.

The latest figures from telecoms watchdog Oftel show that WAP phones are owned by only ten per cent of the UK population, although this figure
has risen from seven per cent in the previous quarter. In comparison,
Oftel says there were just under 44m UK mobile phone subscribers in
September 2001.

>From the IT side, the development has been led by manufacturers like
Palm and Compaq, with the battle focused more on operating systems and
on providing synchronisation functionality, so users can use handhelds
as extensions of their desktop machines.

There are one or two other devices that attempt to marry up corporate
computing and wireless connectivity, such as the RIM Blackberry, which
provides always-on access to corporate e-mail and basic personal
information via GPRS. Quite a few organisations have shown interest in
the Blackberry because it provides cost effective two-way mobile data,
but its big drawback is that it doesn't provide voice communication.

Pumatech is a leading provider of software synchronisation with its
Intellisync technology and is rolling out its Mobile Application
Platform to develop personalised content for mobile devices. The
interesting thing about it is that Pumatech has not tried to second
guess which way the market may go, but has developed the software for as wide a range of devices as possible, including WAP phones, mobile phones with SMS, Palm handhelds and pocket PC devices.

Not just a fancy diary
Where does all this development leave the channel? Sharp's Klein says
resellers have to start thinking about handhelds as more than just
standalone bits of hardware. "They need to see this as a networking opportunity within the enterprise," he comments. "It's about how = to
extend what they already do - but resellers have to be clear on what
they have to offer as part of that."

The basics of this approach would be about providing software, network
configuration and management of portable devices. Keeping PDAs secure is a particular challenge facing IT managers, but Klein thinks no one yet
knows just how handhelds are going to develop. "We are interested in t= he
social aspect and how people may end up using these devices," he argue= s.

He also warns that more general resellers may find it tough to get into
the market. "We sell mainly through specialist PDA resellers and it wi= ll
be a challenge for more general resellers to compete, because it can be
hard to understand some of the technical aspects," he claims. "Ha= ndhelds
are complicated."

On the other hand, Prash Vadgama, European sales and marketing manager
at GPS manufacturer Navman, says that while software development for
handhelds is moving along, there is no need to see the devices as
particularly complex. "They are very simple," he says. "Thes= e are just
devices with a processor and a screen - so in our terms, they are
viewers."

To date, reveals Vadgama, most content for handhelds has been pretty
basic. Not surprisingly, he sees mapping and location information as the foundation for far more interesting and useful applications. "We want<= BR> these devices to be used for more than one simple application," he
comments. "People can use mapping data and location guidance as an
asset. The next stage will be to look at two-way communication devices.&quo= t;


As well as the four existing UK mobile network operators, there are
other networking technologies around that can enhance the use of
handhelds. Packet-switched wireless data networks, such as Transcomm's
Mobitex, provide real-time wireless links between remote users and a
central network. These networks do not, however, provide voice
communication and are better suited for short, frequent data
transmissions, rather than transferring large volumes of data.

Vadgama says the use of handhelds as two-way communication devices with
more complex applications will boost the market. One obvious focus is
the public sector, particularly the emergency services. Many police
forces and ambulance services are already trialling remote devices
supposed to provide them with accurate location information, enabling
them to reach emergency situations more quickly and feed back
information to a control centre or emergency room. "If you see a
handheld as a fancy diary, there is probably not much of a market," Vadgama claims. "But viewed from the correct perspective, there is a market." He adds there are many channel opportunities. "There's installation, training, maintenance and upgrade," he suggests. "T= his is
a genuine business model with a genuine role for the reseller."

Navman software runs on both Palm and Pocket PC platforms. In the UK,
the company works through distributor Computer 2000 for broad-based
consumer sales and A2000 for more specialised sales. "With A2000's nic= he
experience in wireless mobile communication channels and C2000's
extensive full sales experience, we are confident that resellers will be fully supported and therefore able to maximise the true market potential for GPS technology," claims Vadgama.

Tough competition
Companies like Navman are banking on the fact that bespoke software
development will play a big role in the growth of handheld sectors as
companies realise the potential for cross-referencing data and mapping
information. "I'd guess the profit on an iPAQ is at best ten per cent,=
but margins for resellers selling whole systems is more like 25 per cent - and we're not talking 25 per cent on a mouse," Vadgama says. "T= hese
are reasonably priced systems."

In fact, the pricing of handhelds was causing concern towards the end of last year. Hardware prices had fallen. By September, there was a glut of products available, particularly at the less expensive end of the
market, leading to fears that manufacturers were failing to capture
buyers.

Palm replaced its earlier m100 and m105 models with the new entry-level
m125 in autumn 2001 at a retail price of =A3169. At the high end of the
market, Palm now has the m515, which competes with Sony's CLIE devices - which also run the Palm operating system - while both companies are
competing with an increasing number of handhelds from various
manufacturers, including HP, Compaq, Casio, Toshiba, NEC and Fujitsu
Siemens.

Market research firm Canalys says that in the final quarter of 2001,
shipments of mobile devices in Europe were down 19 per cent on the final quarter of 2000, from 1,086,891 to 884,885 units, despite a rise in
sales of 12 per cent for the year as a whole.

With growing competition in the market between hardware manufacturers,
prices are still being pushed down.

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