Dell storms into PDA market

After less than three months selling its own-brand handheld computers, Dell may have claimed over 10 per cent market share in the US.

That's according to preliminary figures made available to CEO Michael Dell. Speaking to silicon.com this week, he said: "We've heard different reports for the first quarter. It [market share] may be in excess of 10 per cent but we don't know that yet. And it wasn't even a full quarter."

Dell launched its Axim X5 handheld at the Comdex trade show last November, settling on a sleek design based on Microsoft's PocketPC operating system and resembling the HP iPaq in several other ways. The big difference with other PocketPC-based devices is price - Dell sells two Axim versions for $249 and $349 in the US, undercutting more established rivals.

Dell, as a company, is legendary for picking a moment to enter a market - normally once others have established it and their products are becoming commodities - and winning market share based on price. Low prices are enabled by its efficient manufacturing and direct distribution model, the same model that allows the company to know how many units it has sold of an item, in practically real time.

It thinks PDAs, while yet to be a huge market, have reached that commodotised point, with Microsoft/Intel based models set to become a standard, as with PCs.

However, December figures from researchers at Context show Palm OS-based machines fairing better than PocketPC models in Europe. Sony's Clie handhelds have been big sellers, with Palm's hardware arm holding on to top spot while HP iPaq sales slipped back.

Yet those figures are for retail sales, and Dell is typically stronger with businesses.

Last November, PalmSource CEO David Nagel told silicon.com that Dell would have an impact in the handheld market but that it would not close the gap with prices of some Palm OS-based models.

Commenting on the forecast market shares for the latest quarter, Dell COO Kevin Rollins said: "Customer demand has been stronger than we had expected. But lest you go crazy with that, handhelds sell for a fairly low amount of dollars."

Michael Dell jokingly added: "Our focus strategically is on servers, storage and services - if it doesn't start with an 's'..."