But as the consumer market approaches saturation, vendors are increasingly trying to convince IT departments that PDAs are not only a useful business tool, but also a manageable one. This week, a handful of new products highlight the ways vendors are tweaking their wares to appeal to corporate buyers.
Microsoft led off the week with the release of a new version of its Pocket PC handheld operating system. The re-branded product--now called Windows Mobile 2003 Software for Pocket PC--features a number of small changes meant to simplify its use.
"Most of the cool stuff is under the hood," says Todd Kort, principal analyst with Gartner. "The average end user isn't going to be immediately aware that any kind of major changes have taken place. What they're doing is a lot of things to satisfy IT managers."
One change is a new configuration manager capable of automatically detecting and connecting to Wi-Fi and Bluetooth networks. That will make it possible for users to connect wirelessly without having to deal with any complicated configurations or setups, and without having to ask for help, says Kort. IT departments "don't want those support calls," he says.
The software also includes improvements to the mobile Web browser, easier E-mail connectivity through integration with Microsoft Exchange Server 2003, support for Windows Media 9 audio and video, a new photo album application, support for stronger security standards, and better functionality for running on hybrid mobile phones.
Microsoft's intent is to make devices that use Windows Mobile easy enough for use by anyone in a company and to remove any hurdles that might keep a company from deploying the devices, says Nucleus Research analyst Rebecca Wettemann. "They've improved the user experience."
Hardware vendors have embraced the software and are rolling out devices to take advantage of the new features. Gateway Inc. next month will launch its first branded PDA, the 100x, which will retail for around $350. The device, which will be geared toward business professionals, also will be included in Gateway's bundled mobility system for small and medium-sized businesses. Later in the year, Gateway plans to launch other PDA models, including a low-priced consumer version.
Electronics company JVC also disclosed plans to enter the handheld market. The new JVC iO Pocket PC line of PDAs emphasizes the audio-visual capabilities of Windows Mobile, promising to provide advanced multimedia support, including integration with JVC's digital camcorders. The MP-PV131 and MP-PV331 iO Pocket PCs will be in stores in September, at list prices of $499 and $599, respectively.
Hewlett-Packard also plans to expand its popular line of iPaq PDAs. New models include the h1940, a low-end, slim-bodied model that retails for $299; the h2210, which HP claims is the smallest PDA on the market to include dual-expansion slots, retailing for $400; the h5150, a high-end model for business use, which includes support for Bluetooth wireless technology and retails for $549; and the top-of-the-line h5550, which incorporates a thermal biometric fingerprint reader to ensure data protection.
Some enterprises already are seeing the benefit of equipping workers with PDAs. Global freight company Menlo Worldwide Forwarding recently equipped more than 800 drivers with Pocket PC devices. The Symbol 8146 portable data terminals receive dispatches over a radio LAN with instructions on when and where to make pickups. When drivers handle a package, they use the device to scan a bar-code label on the box, instantly beaming tracking data back to the home office.
Menlo has had no problems managing the deployment, says Ron Berger, managing director of IT. "We've had no issues with it whatsoever, and it's been accepted very well by the users," he says. "It's going really well." Because the devices are wirelessly connected, the IT department is able to push software updates and new applications to users--something that makes management much easier.
Still, only about 28% of all PDA's worldwide were purchased by businesses, Kort says. "I still don't think enterprises are adopting these things in big quantities," he says. "But it's a big enough market that even if they're just putting their toe in and getting lukewarm about it, it's enough to translate to a little bit of growth."
Palm-powered devices still dominate the handheld market, accounting for 55% of all sales in 2002; Windows-powered devices make up about 26% of the market. But that may change. "I recall a couple of companies that were the leader in spaces that Microsoft overtook," says Nucleus' Wettemann. "Being the leader isn't insurance against Microsoft."
Growing interest by businesses may help Microsoft. "You could walk into the typical corporation and you'd probably find more Palms than Pocket PCs today, though its more likely that the Pocket PC's were bought by the company or reimbursed by the company than the Palms were," Kort says. In the first quarter of this year, Palm OS devices accounted for about 30% of enterprise sales, while Windows devices grabbed 55%, he says.
That growing lead and focus on corporate users is likely to pay off for vendors of Windows devices soon, Kort says. "Microsoft has come a long way toward capturing the hearts and minds of IT folks," he says. "The devices are getting better, more secure. Once the economy turns around, people are going to take a look at this and say, you know, this could work."