New report concludes: Palm and Handspring are fighting a loosing battle against Microsoft and others
| A new report by Strand Consult concludes that neither Palm nor Handspring are likely to survive the convergence of mobile phones and Personal Digital Assistants (PDA). A convergence, which will form the market for Smart Handheld Devices (SHD): Neither Palm nor Handspring has the distribution power necessary for operating in the Smart Phone and SHD market Neither of the companies have the financial muscle necessary to compete with Nokia, Ericsson/Sony, Siemens, Motorola, and now also Microsoft The PDA value chain and price structure means that products become 30% more expensive at retail level than those shipped through the value chain of the mobile industry. The market for Smart Handheld Devices is expected to grow rapidly over the next few years, as 2.5G and 3G mobile services become widely available. Making use of these new services will require new terminals. With almost 10 million units sold in 2000 alone, one should think that PDA producers like Palm and Handspring enjoy a head start in relations to the market for PDA’s. This is not the case! Both companies are dwarfed by its now competitors – the producers of mobile phones – who in 2000 sold 410 million units! Neither Palm nor Handspring has the distribution or financial power to compete with Nokia, Ericsson/Sony, Siemens, Motorola, and now also Microsoft. Nor have they any experience of operating in the value chain of the mobile industry. However, is Microsoft not in the same boat with Palm and Handspring? Well, all three have the experience of building operating systems designed for non-voice, rather than voice communication – something the producers of mobile phones have not. Nevertheless, there is a difference between Palm and Handspring on the one side and Microsoft on the other. The difference is in their respective customer bases and associated applications. Microsoft’s 2.5G Smart Phone platform may be new, but it will be able to piggyback on Microsoft’s existing customer base, which, thanks to its Office, Exchange and Hotmail applications is many times bigger than that of both Palm and Handspring. And, most importantly, the MS Smart Phone platform will offer integration with these very widely distributed applications. Microsoft may be the dark horse in the SHD race against giants like Nokia. But, contrary to Palm and Handspring Microsoft has a fighting chance. As things stand, Palm and Handspring do not. In a new report “Strategic Challenges In The Future Market For Handheld Devices” Strand Consult paints a strategic picture of the market for handheld devices and the challenges that awaits players in this market. Most importantly the report shows how and why the convergence of mobile phones and PDA’s, must also involve media companies, software producers and mobile network operators. The report maps the many challenges facing those looking to do business based on non-voice mobile services. |
| More information on the report |
