Editor's note: This column is part of a two-day series on handheld devices, running May 6 and May 7. An overview details
It's a post-PC world. At least that's what
analyst Steven Milunovich and a lot of other people are calling it. Portable gadgets and information appliances will supposedly rule over stodgy desktops, and people will carry their offices in their breast pockets.
International Data Corp.
predicts that handheld devices will supplant PCs as the No. 1 selling computing product by 2002. Even
chief Lou Gerstner says the golden days of the PC are over.
The computer makers, however, have been slow to catch on.
is rallying support for its
, a smaller version of the ubiquitous operating system, as an alternative to
Palm OS. But even that hasn't spurred interest with some.
Despite all the hoopla and predictions, many top PC makers are betting that information appliances -- gadgets that can do everything from check email to provide real-time news -- will remain a niche product dominated by the
. They aren't missing the boat because it's not sailing.
"We don't buy into the thinking that these handhelds will replace the PC," says spokesman T.R. Reid from
, which has quickly moved into such product lines as storage, servers and workstations. "It's not an area where we currently have an interest."
Unquestionably 3Com dominates the field. With the Palm unit, the company captured 79% of the handheld market in the U.S. last year, according to the latest data from IDC.
followed, with a puny 6%.
don't even show up on the list, although they only recently launched ad campaigns for their respective PalmPilot-like gadgets.
Handhelds just aren't attracting the big dollars that other areas such as services and storage are getting from the likes of Compaq and Dell, it seems.
Some PC makers are staying away until they are certain there will be an abundance of applications for these machines. Windows CE "needs a lot better application software that consumers find simple to use," says Seymour Merrin, president of
Merrin Consulting Services
, a tech consulting firm.
Dell and the other PC makers no doubt still remember how
launched its own handheld device, the clunky
, with its buggy handwriting-recognition software, in 1994. Newton flopped badly despite a massive marketing campaign and interim CEO
killed it off soon after he took over. Interestingly, Apple may be set to
tackle this field with another new product, code-named the
and expected later this summer or in early fall.
Compaq experienced its own problems with a home-theater product developed with
was a bust, and with little fanfare, Compaq walked away from the product about a year ago, according to Sean Kaldor, vice president for developing markets for research firm IDC.
More successfully, Compaq unveiled its
, a Windows CE-compatible handheld product. Compaq is keeping mum about sales, but Aero 2100 is still not even on the map compared with the PalmPilot. Compaq may be so late to this handheld game that it should catch the next hot appliance wave, says Merrin.
Ironically, H-P, long a technological innovator in PC-related areas such as disk drives and printers, had a great chance to win the PalmPilot market in the early days from 3Com, but let the opportunity slip, says Merrin. "H-P should have had the
handheld-device market wrapped up by now." Instead, H-P has its own Windows CE-powered handheld computer, called the
, which owns less than 2% of the market, according to IDC.
3Com's most ambitious rivals may be consumer-electronics companies from other countries.
, Philips and France's
are just three of the bigger players. Thomson unveiled plans last fall to join with
, Microsoft and
to work on handheld projects. And Philips recently launched a handheld device called the
and a Windows CE-powered, 16-megabyte
mini-PC, which at $499, is priced attractively compared with competitive products from H-P and Compaq.
Meanwhile, many U.S. PC makers are betting that these information appliances will be no more than a fad and that the PC will become a "hub" for home data flow in the future. "PC vendors are positioning themselves for being a home network for new audio and video devices," says IDC's Kaldor.
What's likely is PC makers will continue dipping their toes into the handheld market while waiting for a new product line or software OS to emerge after the PalmPilot's Palm OS. One possible OS contender is
. If this OS continues to generate interest, PC titans can partner up with Linux licensees such as
Red Hat Software
-- Dell already has -- and develop hardware products to complement it.
This could be a second chance to catch a ride on the bandwagon, even if it's unclear where it's headed.
What handheld device would you never leave home without?