PDAs battle for supremacy

The battle of the handhelds is heating up — and the results seem to be increasing volumes and lower prices.

It has been a busy few months in the handheld market. Hewlett-Packard Co. announced it would retire its Jornada series as part of the merge with Compaq, then a raft of new PDA technologies from vendors such as Sony Corp., Handspring Inc. and Toshiba Corp. bombarded the channel, each proclaiming the virtues of connectivity, portability and entertainment.

The new products follow hot on the heels of a PDA boom, with Inform reporting unit sales for March jumped 28 per cent. The products have also re-ignited the debate between operating systems. Toshiba is touting Windows Pocket PC as the way of the future, with Sony and Handspring sticking to the Palm OS.

Toshiba makes no bones about actively going after the Palm market with its newly released e310. At A$899 (US$512), Toshiba hopes the handheld will capture market share within the consumer market as well as the business sector. “We have seen a huge hole in the market for Pocket PCs,” said Justin White, Toshiba’s product marketing manager for its information systems division.

The device is essentially a slimmed-down version of Toshiba’s flagship product, the e570, which was launched in Australia last year. The Compact Flash slot is gone and memory for the device has been trimmed from 64M bytes to 32M bytes. But the device still offers higher-end features, such as support for VPN client services.

“Its value for money is far greater than Palm,” White said. “We hope to erode the Palm OS share over the next few months. The key catalyst is that our price point is now cheaper than a lot of the competing Palm products.

“If they (Palm) are not worried, they should be.”

Palm executives, however, remain confident that Pocket PC vendors will find the consumer market difficult to crack in the face of its current offerings. “We’ve been hearing this story from the Pocket PC people for a long time now,” said Michael Mace, chief competitive officer at Palm in the US.

“The Toshiba product is a little less expensive, but it is still far above the mainstream sales for handhelds. Most handhelds retail for around US$200 and Toshiba is nowhere close to that. I certainly respect Toshiba as a company but we are not concerned about the Pocket PC in retail because it is not getting into the mainstream price points,” Mace said.

“The one-size-fits-all approach works well in PCs, but not with handhelds. Palm products are customized for the individual. We are trying to focus on freedom of choice. There’s a real contrast to the PC-style design on the Microsoft side, which tries to be all things to all people, versus the Palm OS approach.”

Palm is nevertheless very aware of the power that Microsoft holds in the marketplace. “Never turn your back on Microsoft,” he said.

Although Inform figures show the Palm OS continued to lose market share in the corporate sector during March, Palm believes it will gain back some momentum in that sector over the coming months.

“Corporations buy the products they think are going to do the best job. So far, I think we are doing a good job fulfilling those needs,” Mace said.

“Microsoft has an entrenched position in the enterprise.”

Palm is online at http://www.palm.com

Compaq is online at http://www.hp.com