Convergence will drive users to ditch standalone PDAs

Research house IDC is warning PDA manufacturers that customers will soon start ditching their handhelds if they do not start offering voice functionality.

The report from IDC said that over the coming years, consumers and businesses will begin to demand advanced handheld devices, such as PDAs and handheld PCs, with voice communication functions that allow users to make mobile phone calls.

The movement in the market comes after the massive growth in recent years in demand for standalone data-focused handhelds, which in upcoming quarters will not be highly sought.

Already there are a slew of converged devices on the market such as O2's XDA and HP's Jornada 928, which are effectively Pocket PCs that also function as a phone. There has also been slow growth in the demand for voice-centric devices that include advanced data applications, commonly called smartphones, such as the SPV by Orange and Nokia's 9210 Communicator.

IDC says that handhelds in both categories are the future and that they will draw users away from traditional PDAs that do not offer wireless connectively and voice functions. The company claims that this year the worldwide non-converged handheld device industry will decline by 8.4 per cent to 11.35 million units, its second straight year of decline, and next year growth will be muted.

Referring to standalone PDAs and handheld computers, IDC said: "Dreams of a 20 million unit-a-year market will be replaced by a less than 15 million unit-a-year reality. [It is] a reality that is finding companies like Dell, Handspring, Hewlett-Packard, Palm, and Research-In-Motion looking to converged mobile device production."

In fact, IDC forecasts that the converged market will see its strongest year of growth in 2003 on the back of new Symbian-powered devices, pushing shipment beyond 13 million units.

Kevin Burden, manager of IDC's mobile device research team said aesthetics and functionality improvements, as well as lower prices, will attract mainstream consumers driving compound annual growth in the sector to about 86 per cent until 2007.

Smartphones will be an especially strong segment, added Alex Slawsby, research analyst in IDC's mobile device research team, mainly because voice and text communication will remain the killer applications for most owners.

However, not everyone agrees with this prognosis. Simon Buckingham the CEO of Mobile Streams, a UK-based consulting firm, said that there will be a market for all devices, including standalones. Buckingham admits that converged devices will grow in popularity, but predicted that the market will be no larger than the standalone market in five year's time. He also acknowledged that the pending merger between Palm and Handspring is evidence that Palm is looking to gain a stronger foothold in the converged sector, but Buckingham suggested that the company is likely to continue to push traditional Palm devices for the foreseeable future.

"I don't think any huge conclusions can be drawn about the industry at this stage," Buckingham said. "Our philosophy is, 'different devices for different people.' And don't forget there is a big installed based of people with Palms and other handhelds who may not want to switch. It's our position that there is a future for all devices."

Matthew Clark writes for ElectricNews.net