2001: The Year Handhelds Take Off

Posted By: Ed Tuesday, February 27, 2001 1:21:33 PM

IDC has released a study that predicts that this is the year that heldheld devices really catch on. Kevin Burden, manager for IDC's Smart Handheld Devices research program, said, "2001 will prove to be the year when mobile access devices hit their stride.'' They also predict that the worldwide market for smart handheld devices will grow from 12.9 million units in 2000 to over 63.4 million by 2004.

Mr. Burden warns that PocketPC and RIM devices are starting to cut into Palm's lead. "While Palm continues to reign supreme, for the first time the company is facing a solid threat to its dominance.''

Because Microsoft has an existing business relationship with many companies, Mr. Burden said it has an advantage over its competitors as more corporate customers purchase smart handhelds.

"Palm still owns this market and will for some time, but will IT managers support Palm and choose it as the company device? IT managers are comfortable with Microsoft and its OS. IT managers tend to work off checklists. Because Palm has not worked in the enterprise segment before, there may be more checks on Microsoft's side than Palm's. Palm will have to adapt and evolve because other devices offer more," he said.

The majority of smart handheld devices are what IDC calls personal companions, a step up from PDAs. Mr. Burden said PDAs are simple devices that consist of a contact manager and a calendar. "A personal companion is a pen-based organizer. PDAs existed before personal companions. Palm took these to another level," he said. "You cannot put a Palm device in the same category as an Apple Newton. Some of the functionality may be similar, but personal companions evolved."

According to IDC, smart phones, like the ones coming soon from Kyocera and Samsung, will be the fastest-growing segment of the market. From 480 thousand in 2000, shipments of smart phones will increase at compound annual growth rate of 164% to over 23 million by 2004. In comparison, the overall market will grow 48% annually.

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comment on handheld sales going down?

I.M. Anonymous @ 2/27/2001 2:16:03 PM #

was it this site, or possibly another site, where some analyst firms predicted that handheld sales would actually go down? wondering what the source or who the analysts may have been on that.

IDC Biased?

Lucky Dragon @ 2/27/2001 3:40:52 PM #

IIRC, these folks are the same naysayers that in 1999 were predicting 55% marketshare for PocketPC in 2002. Sounds to me like they have an axe to grind here. What I can't understand is why C|Net and ZDNet parrot this stuff like it's gospel or something. Seems more like thinly-veiled Microsoft FUD to me.

Biased Indeed!

I.M. Anonymous @ 2/27/2001 5:23:59 PM #

Yes, you're right - they're the same ones two years ago who said WinCE would have significant market share. That they assert that "IT Managers are comfortable with MS..." is actually a little insulting, because it implies that the managers can't think their way out of a wet paper sack. Enterprise solutions are clearly on a Palm OS track right now, and that trend line isn't being swayed much by MS either with PocketPC or the embedded WinCE 3.0 product.

RE: IDC Biased?

I.M. Anonymous @ 3/1/2001 10:56:26 AM #

There's on old saying in IT departments: No one ever got fired for buying Microsoft. Maybe the same thing is true for analysts: No one ever got fired for predicting that Microsoft will dominate any market they want to. Whether this turns out to be true or not.

,,,

I.M. Anonymous @ 2/27/2001 6:09:31 PM #

2001: the year the handheld computer market starts acting as the desktop market,

wow

Nate @ 2/27/2001 6:17:34 PM #

Wow. That's some good news. I thought things were pretty good now :)

I don't see the PDA replacing the desktop PC, but I certainly see it replacing the laptop for a lot of people.

Syncplicity. Redefining Simple. www.cognitiveroot.com

These guys are clueless...

I.M. Anonymous @ 2/27/2001 7:48:19 PM #

Not only have they predicted Microsoft's dominance over Palm every year that I can remember, but they have apparently never actually tried to use any of these so-called "smart phone" features. Come on, guys...it's a friggin' PHONE! This is almost as dumb as thinking that people want a PC in their car stereo. Oops, well...I guess we know who jumped into *that* market feet-first. ;-)

RE: These guys are clueless...

I.M. Anonymous @ 2/28/2001 12:07:33 PM #

Not to mention that it seems unlikely he's ever used a Newton seriously. The Newton failed on the size/weight/price fronts but definitely not on the software. I know people still using the final Newton model, the one where using handwriting was by far the fastest way to enter correct text and they love it!

Wow, proven wrong in less than a week!

I.M. Anonymous @ 3/1/2001 5:55:33 PM #

The Symbol Sears deal is clear proof that Kevin Burden of IDC is full of crap. Lets look at the blinding facts:

1) Symbol makes both WinCE and Palm devices.
2) Sears chooses the Palm device.

We don’t know the details behind the decision, but maybe Kevin should look into it (that is... if he ever has time away from kissing MS ass).

In it's infancy

I.M. Anonymous @ 3/2/2001 8:39:02 PM #

Predicting Palm's eventual demise at the hands of Mocrosoft is quite premature considering that this technology is still in it's infancy. Palm's OS, even in it's infancy, is quite user friendly. Microsoft's DOS OS in it's infancy was quite the opposite. Microsoft filled a need with very little serious competition. Palm has done quite well with a lot of competitive and viable devices in existence. Palm has made some mistakes(the VII and VIIx packaging for example)but, as long as they remain inovative and provide the consumer with useable real world products, they'll continue to dominate. The wireless industry needed a "kick in the rear" so to speak, and it seems that the handheld industry has provided just that.