Dell New PDA Due, Seen Stirring Market
Posted by configure on 05 November 2002 - 09:07 · no comments & 289 views
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"We are going to announce and start taking orders on the 18th," spokesman Cody Pinkston said. "It will start shipping shortly afterward."
Personal digital assistants, or PDAs, are popular pocket-sized devices used primarily to manage contact or date book information. Palm dominates the market for both PDAs sold, and for the software that drives handhelds, which it licenses to manufacturers such as Handspring Inc. and Sony Corp.
Experts suggest that Dell's ability to deliver a low-cost product might nip at one of Palm's key marketing advantages. To date, Palm-driven PDAs on average cost far less than Pocket PC devices, such as those sold by Hewlett-Packard Co.
"Whatever Dell gets into, they do so because they can blow out market share and revamp that market by being much more aggressive on price point," said International Data Corp. analyst Alex Slawsby. "One would expect Dell would take the same strategy into the handheld space."
A price war could present problems for smaller handhelds makers like Palm, since Dell, and other rivals like H-P are far more diversified and can survive the harm lower prices inflict on profit margins.
In addition, it would likely bring prices for Pocket PCdevices -- currently more popular with business customers -- down to levels that might catch the eye of consumers.
Dell announced its plans for handheld device orders late on Monday afternoon. Its shares fell slightly to $29.89 in after-hours trading. They closed regular trading at $30.05 on Monday, up $1.07, or 3.7 percent during regular trading.
DESPITE THREAT, PALM DOMINATES
Still, despite the competitive threat and an overall slump in demand for handhelds, Palm continues to rule the market. Some 74 percent of all handhelds are powered by the Palm OS, and about 24 million Palm OS-driven devices have been shipped.
According to research firm Gartner Dataquest, Palm shipped in the third quarter some 800,000 units, more than the combined total of No. 2 through No. 4 largest handheld makers -- Sony Corp., H-P, and Toshiba Corp..
In acknowledging the Dell entry and other Pocket PC models, Palm has said it offers users a range of devices to choose from at competitive price points. In October, Palm unveiled its newest products for the key holiday season; the low-end Zire, which sells for $99, and the "Tungsten T," a $500, high-end model.
Dell's Pinkston declined to supply details on the Axim X5's price, design or availability. But a Dell Web Site boasted the handheld -- would offer "the ultimate in Pocket PCs ... at unheard of low prices" and feature a voice recorder.
Moreover, Anthony Bonadero, director of worldwide mobile products for Dell, recently told the Toronto Globe and Mail that the company hopes to have a 25-percent share of the Pocket in 2003, and believes Dell will ship up to one million units.
He also said there will be 15,000 Dell-branded PDA units available at launch, and that the company aims to build up to 100,000 units by January 2003.
Pinkston confirmed that Bonadero was interviewed by the newspaper, but declined to comment further.
Dell has said it would expand into the printer and handheld markets, where it is expected to apply its renowned low-cost business model to cut prices and grab market share.