The Strathfield Group Limited (SGL) has made an aggressive bid to accelerate retail sales of handheld technologies by acquiring specialist retailer and software developer Eworld last week.
The deal gives Eworld the capital injection required to roll out its unique business model nationally.
Eworld currently operates from one store in Sydney's CBD, specialising in the development of complete handheld software and hardware solutions.
SGL has committed to a rapid expansion of Eworld stores, including opening one in Melbourne "almost immediately", according to Andrew Kelly, SGL's managing director. Brisbane will follow soon after and Eworld will be "a national business within six months", Kelly said.
The acquisition is viewed by both companies as highly strategic for SGL because of Eworld's software development arm and the role this techno-logy will play in enterprise and consumer mobile computing solutions of the future.
SGL paid "under half a million" for Eworld, which "wasn't a lot of money" in the opinion of Kelly. He added that the previous owners, Robin Simpson and Steve Hall, are looking at the long-term picture and are being "remunerated on success".
"We think this product [handhelds] will be a large part of our business in the future," Kelly said. "Our SOHO business currently comprises only 15 per cent of overall turnover and we want to grow it to one third. Handhelds will form a major part of the total solutions we want to be able to offer our customers."
Hall, who is also managing director at Eworld, believes the crucial part of the investment by SGL is in the software development operations of the com-pany. The new potential of Eworld excites him and he is looking forward to gaining access to SGL's 765,000-strong customer database.
"We have a lot of skills in several handheld operating systems and have become one of the core developers for these platforms in the Southern hemisphere," Hall said. "Strathfield has recognised that an ability to be able to provide strong support in this area as being critical to the mass adoption of this technology.
"Handhelds offer unlimited potential for organisations to leverage existing investments in IT infrastructures. An organisation like Eworld can provide a broad range of add-on services to achieve that," Hall added.
As well as fast-tracking expansion plans, coming under the big and powerful SGL umbrella will give Eworld added credibility when pitching to corporate and SME markets, Hall said.
John Slack-Smith, general manager, computers and communications, at Harvey Norman, said it too was looking at opportunities in the handheld computers market. However, he feels vendors have struggled to come to grips with the concept that price sensitivity stimulates consumer demand.
"Handhelds are a growing part of our communications business and we will continue to market them as new technology comes up," Slack-Smith said. "Price points will have to come down before there will be mass adoption."
Felix Wong, technical director of distributor Advanced Portable Technologies, said that after committing to the handheld category, they are starting to see the potential in the market. Wong thinks the growth of the market will be similar to that which was seen previously with mobile phones.
"The market is still not huge. However, once people start to realise the potential and enterprises recognise the efficiencies, it will grow very quickly.
"The potential is enormous because handhelds can be used for both personal and corporate functions whereas the mobile phone is essentially just for personal communication at this stage."
Wong was also quick to point out that the form and function of handheld devices will change but the concept can only grow, a point Kelly agreed with.
"We are probably going to have to reinvent ourselves three or four times over in the next five years," he said. "Unless you can provide a point of difference and add value, you can't exist. Leading the way with this technology gives us that differentiator."
In a recent review and forecast of the Australian smart handheld device market, IDC's Gianco Melcarne predicted that sales of personal or PC companions would reach $44 million (from 54,000 units) in 1999, which represents a 95 per cent growth over 1998.