The concept of using a personal digital assistant (PDA) to read e-mail and make appointments has become passé. These days, handheld computers take photos, run PowerPoint presentations, record voice memos - even make phone calls. Long the quintessential executive accessory, the handheld market is maturing as users demand - and get - more functionality while maintaining both size and style.
PDAs look set to enjoy a very positive uptake, with IDC predicting the worldwide smart handheld market will grow from 12.9 million units in 2000 to more than 63.4 million by 2004.
Since its inception the market has been dominated by Palm. Indeed, the company often finds its products the object of choice in many lifestyle advertisements without its knowledge - and Palm executives are quite chuffed with the exposure the device attracts.
"The Palm has become a status symbol," said Paul Leeper, director of market development for Palm. "It has really become an icon of our culture. Musicians are seen with them at the Grammy's, it shows up in movies and on billboards - and Palm has never paid for product placement. It is included because it is part of our life anyway."
But Palm is facing increasing pressure from a raft of handheld offerings, each providing increased functionality and content.
Last year, Compaq launched the iPAQ handheld and Casio launched an entry level offering in the Pocket Viewer. To top it off Ericsson introduced its R380, a mobile phone that doubles as a PDA. In March, Handspring launched its Visor range in Australia.
"There are a lot of hardware solutions out there but the secret is linking the software into the back end of existing systems," said Felix Wong, managing director of Advanced Portable Technologies (APT), which specialises in the distribution of handheld computing solutions. "Putting your e-mail and diary on to a handheld is the most rudimentary functionality."
For Palm, the answer to providing more functionality lies in its expansion architecture.
Key to this is the use of a universal connector, allowing third party developers to build add-on peripherals for the devices. In terms of content, the vendor has included an expansion card slot for use with Secure Digital (SD) and MultiMedia cards. Palm envisions using the two expansion capabilities interactively - combining a global positioning system module with a city guide to find the nearest hotel or restaurant, for example.
Palm currently offers seven branded cards - two with utility functionality such as a backup card which can store all data from the Palm and, like a floppy disk, includes a write protection switch and five content cards with applications such as guides, travel management, currency converters and language translators. According to Palm executives, the company chose to go with this media because of its interoperability.
"You can take a photo and put it into your Palm," Leeper said. "It is very cool technology and that's something both consumers and corporations will like because it is out of the box technology."
Claudia Romanini, senior director of Palm's market development and services group, challenges users to fill the cards with data.
"It lends itself well to enterprise because now you can carry an entire database with you," she said. "Now companies can make Palm more powerful."
Form factor is still one of the major considerations for Palm. However, Stuart Palmer, general manager for Vodafone Mobile Data Services, a division which distributes Psion and Handspring handhelds in Australia, said that as the market becomes more sophisticated users will begin making purchasing decisions based around functionality rather than style.
"A lot of people still make decisions based around form factor," Palmer said. "There is a lot more functionality in a Psion than your tablet-style handheld device, but consumer purchase trends are skewed to buying tablet devices. In a couple of years time you will find the more sophisticated Palm users have moved to a Psion experience because they know what they want in terms of applications."
Vodafone was first off the rank for distribution of the Handspring Visor family.
"The exciting thing is the two products appeal to different users," Palmer said.
Education on the differences between products is mainly through two channels - point of sale and the Internet.
"The Web is a good source of information," he said. "At the point of sale specialty stores or larger department stores with the space to display the product provide a good stage to tell the story and then add value. In Handspring's case the Springboard module allows the user to personalise their device. People then have a choice and the reseller can begin to extend the handheld's functionality into other markets."
Those markets include MP3 players, digital cameras, bar-code scanners, and global positioning systems. The Visor Phone module will hit shelves in Australia in around 60 days.
Walking without wires
Wireless technology, the philosopher's stone of portable computing, looks set to make its mark on the market later this year. Palm's expansion card slot will also accept secure digital input/out (SDIO) devices, including the Bluetooth protocol and is currently testing Bluetooth devices from the likes of Toshiba and Panasonic.
"It is not so far away," Leeper said. "It is a key technology and if we see it by the end of the year that would be great."
APT's Wong said wireless technologies would provide a much larger opportunity for the channel.
"Future technologies will see handheld devices with built-in wireless data communication. That can be wide area, local area or Bluetooth. At the moment WAP [wireless application protocol] is very much handset-based but as wireless data logs and content increases, we will start to see it in the handheld market as well."
While integrated wireless devices are just down the track, Vodafone has had very strong uptake with its bundled wireless solutions.
"My gut feeling is that [integrated wireless devices] are still around eight to 12 months away," Palmer said. "The challenge is keeping the price points where they are today. Meantime our two-box solution - the Handspring with the phone Springboard module and the Psion and mobile with the infrared capability - has really worked to get mobile connectivity."
Is it a phone?
The trend towards wireless handheld computing has yielded an interesting by-product - the convergence of the mobile telephone and the PDA.
While traditional phone vendors such as Ericsson and Nokia dabble in the PDA market, likewise handheld vendors are offering add-ons that transform the device for use as a mobile phone.
The trend has seen both sides scrambling to develop convergent technology. Ericsson, which already has a smartphone on the market which doubles as a PDA, is currently working on a Communicator device whereby mobile phone functionality will come second over PDA use. Likewise Nokia's upcoming 9210 Communicator promises a 4096-colour display with Windows compatibility, high speed Internet access and the EPOC open operating system.
"It is anyone's guess which way the market will go but at this stage there is room for both," said Cameron Cooper, general manager of Ericsson's consumer division.
"We are slowly seeing a change in the overall market. Traditionally, people have used phones for functionality while handhelds have been more led by fashion. Now the trend is more towards features and functionality so the other possibility is to integrate the devices into the one handset."
The biggest take-up of smartphone technology has been amongst mobile professionals at the highest levels of organisations, particularly those who travel extensively.
According to Cooper the features incorporated into the phone will become standard in years to come.
"The power is the ability to use the device in ways that make professional and personal life simpler - that is a major selling point."
APT's Wong agrees the market will see confluent technologies in the future.
"There will definitely be some form of convergence in the future, I think that is why Brightpoint has taken an interest in APT," he said, referring to the acquisition by the telecommunications outsourcing and distribution company last year.
"The smartphone technology has very rudimentary PDA functionality. It has the basic applications, but at the end of the day it doesn't have anything like the Palm or Pocket PC."
"It is hard to put the two devices together and make it into one," Palm's Leeper concurs. "There is an unconscious portability factor amongst users and they want the same thing in their phone. Right now the form factors are too big and most people are quite happy in the two piece world.
"We'd love to see convergence and I think we will see it in time, but right now the form factor is too big for us. It is a cool interface, but it is still an early market."
It's all about content
"Datacentric devices like PDAs lend themselves more to the Internet than to voice applications," pointed out Romanini. "My killer app is not logging onto my phone list, it is being able to access very focused information."
That ability is increasingly finding application in the enterprise market, particularly in verticals such as consumable goods, field services and healthcare that need mobile data solutions.
"Corporations today recognise that for certain industries and workforces handhelds are a truly appropriate platform to develop applications," said Ashley Bloch, managing director of Freedom Technologies, the sole licensee of AvantGo software in Australasia.
Building enterprise field management applications for companies such as Goodman Fielder, Bloch has learned integrating handhelds is a lot more difficult than simply adding on mobile devices as an extension of the system.
"You are building an application from scratch because you always have to integrate the technology with existing systems," he explained. "It is not just taking existing applications and creating a mobile extension because we don't think that will work."
For example, handhelds provide enterprise with the opportunity to capture time and motion data - something back-end systems do not do. Many third-party developers are now offering solutions which allow users to connect to the server.
"You have to have the right software," said APT's Wong. "It is not hard to develop a simple application that allows customers to enter data electronically in the field and link it to the network. Then the possibilities are endless. Being able to automate manual operations - that is the new regime."
For the reseller the opportunity, and the challenge, is being able to educate their clients on the ever-expanding applications for handheld devices. With all the different functions, it is difficult for resellers to keep up with what is available and where technology is heading. That is often where distributors can help.
"Being able to inform the customer this stuff is out there is very important," Wong said. "We are about putting together solutions and helping resellers sell these devices to corporate customers. Once you start talking to your client there is a wealth of untapped opportunity in this space.
"That is where we come in," Wong said. "We can advise our dealers on what is out there and how to integrate the devices into a corporation. Of course, you can simply sell a handheld, but you have to sell a hell of a lot of them to make a dollar out of it. Resellers must use the handheld as leverage to sell other products and services."
Fear is the market killer
For now, the challenge for the channel is to help end users overcome the fear factor often associated with handheld technologies. Vendors have begun the process by introducing entry level devices to the consumer market. Ironically, this fear may also be a factor in whether or not PDAs converge with the mobile phone market.
"Research indicated there can often be a lot of fear associated with a device like this, so Ericsson is taking a new approach and incorporating three hours free training with the R380 kit," Cooper said.
The company has teamed up with long-term partner Wireless Data Service to train users in aspects such as setting up the Internet, WAP and SMS, from basic training through to utilising the full power of the phone. Ericsson also offers the same deal to corporations, buying "fleets" of phones.
"They [mobile phones] will never have the full function of a PDA. There are differences and it really depends on the user. Some people will always need the Palm or Pocket PC."
One thing is for certain - for the market to flourish handhelds must be perceived by their users as far more than digitised organisers.
"Users have to stop looking at handheld devices as personal organisers with e-mail," Wong warned. "That is nice, but at the end of the day, it is not all that exciting."