The acceptance of mobile applications will depend to a certain extent on the proliferation of smart handheld devices. Two recent reports from market researcher IDC present contradictory data regarding the health of the handheld device market, with Europe in particular looking especially poorly.
The research firm reported in April that shipments of handheld devices in Europe had declined by 26 per cent year on year in the first quarter of this year. However, in May a further report predicted that smart handheld device shipments will increase by more than 13 per cent in 2002 and will reach an annual run rate of 31.6m units by 2006.
First quarter shipments in Europe declined to 593,000 units in Q1 this year, compared with almost 800,000 units in the same period last year. IDC puts this down to low seasonal consumer demand and a continued lack of demand from enterprises.
The handheld market did not receive any direct lift from enterprise sales as many organisations failed to view hand-held procurement as a priority for investment. Complicated GPRS billing structures, issues over roaming agreements, and cost deterred investment in new converged devices.
The other story emerging from the European figures is the growth of Microsoft’s Pocket PC operating system at the expense of rivals such as Palm OS and Symbian. Although Palm continues to dominate the market in Europe, with a 47 per cent market share, Palm OS shipments have declined by 37 per cent since last year, and its market share has declined by nearly 50 per cent.
Microsoft has closed the gap, with shipments of Pocket PC growing by 21 per cent, giving the software giant a 39 per cent share of the European handheld operating system market.
Andy Brown, research manager for mobile computing at IDC, said: ‘The availability of Pocket PC 2002 devices from Compaq and HP helped Microsoft take 39 per cent of the handheld market operating system share. Nevertheless, Palm still managed to maintain large volumes through a combination of retail promotions, strategic price cuts, and new product introductions and retained a dominant 47 per cent share.’
Palm continued to dominate the handheld market in terms of units shipped, although Compaq dominated in terms of revenue, boosted by shipments of new Pocket PC 2002 devices. Heavy promotional activities and strategic price cuts from Palm inhibited its revenue growth
A bigger loser in Q1 was the Symbian operating system, promoted by some of the world’s leading mobile phone makers including Nokia and Motorola. Shipments of Symbian-based devices declined by around 56 per cent. IDC explained this was due to a lack of new product introductions and lower demand affecting sales.
However, new feature phone devices from Nokia based on the new versions of the Symbian OS should help to drive shipments in this segment in the future, according to IDC.
On a more optimistic note, IDC published in May a report which predicted that world-wide smart handheld device (SHD) shipments will increase by more than 13 per cent in 2002. It forecast that shipments will increase at a compound annual growth rate of 17 per cent from 14.6m units in 2001 to 31.6m by 2006.
IDC reckons the device market is well positioned to regain its momentum in 2002, propelled by brightening economic conditions, the wireless evolution, new device technologies and increased enterprise device adoption, pen-based handhelds—the majority based on the Palm OS and Microsoft’s Pocket PC OS—continue to drive shipment volume in the traditional data-centric device world.
Another reason for optimism in this expanding market is the emergence of convergence. ‘Converged devices are the next great step in the evolution of the handheld device market,’ says Kevin Burden, program manager for IDC’s smart handheld devices research service. ‘Combining the telephony capabilities of a mobile phone with the data capabilities of a handheld device, the converged handheld market opportunity is positioned directly at the intersection of these two industries and represents one of the hottest trends in mobility for 2002 and beyond.’
Certainly, if the strategy of the world’s second largest mobile-phone maker Motorola is anything to judge by, the immediate focus of smart phones is towards the consumer and in particular the youth markets.
At a recent launch of new mobile-phone products in Dublin, Motorola’s branding and advertising was clearly aimed at the young, cool and trendy with references to dance culture and other youthful pursuits.
With the increased data rates available via GPRS and eventually 3G mobile networks, the additional features of smart mobile phones will be used to ‘alleviate micro moments of boredom’ according to Bob Schukai, director of 3G issues and the Accompli smart-phone product for Motorola in EMEA. People will turn to their phone while waiting in queues or travelling on the bus to play games, download sound files or exchange messages with friends.
All well and good. But there is precious little evidence that there is much demand from corporates for enterprise applications to be delivered via smart handheld devices. As ever, we will wait to see how the proliferation of such devices can spark the imaginations of software developers to deliver something more useful than irritatingly catchy ring tones.
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