The retail sector took a big hit, dropping 40%, Krebs said. "Clearly what happened was the downturn in the economy, and retail going into the recession was already soft in terms of their spend on these solutions,'' he said. Other industries that saw a drop in sales were manufacturing, warehouse transportation, and telecom, he said.
But the outlook for 2010 is better than expected, Krebs said, with performance in the first six months already up and some companies reporting growth of 20% to 30% higher than 2009. For 2010, VDC Research is projecting the rugged handheld computing market will grow to $2.1 billion worldwide, representing a growth of 8.6% over 2009, with 2.6 million units sold worldwide. That uptick will continue through 2014 with an annual compound growth of 8%, the firm said. Manufacturers that will benefit include Motorola, Intermec, Datalogic, Honeywell, LXE, and Psion.
"The surprises were the rate at which the activity increased,'' Krebs said. "We were expecting a slower start to the year and it picked up... retail has really come back and is starting to spend in a significant way." Pent-up demand for the rugged handheld devices is starting to be realized, "driving a boost to spending for retail shop-floor in addition to back-room warehouse applications," VDC Research said in a statement.
The real growth driver for rugged handheld devices continues to be with the "beyond the fence" field mobile workers, Krebs said, which is the least-penetrated market segment and is only now beginning to see the benefits of making certain processes mobile.
Although the market is rebounding, rugged handheld vendors still face challenges, notably, in the growth in competition from smartphones and other devices that have mobility applications. Even though smartphones do not have the level of ruggedness or integrated I/O capabilities, VDC Research said, they are being eyed more frequently as field devices because of their lower adoption cost and growth in the enterprise. Customer expectations from a user interface and experience perspective are driving the attraction to smartphones, even though there is strong developer support for field mobile applications on Windows mobile devices, VDC Research said.