The market for personal digital assistants, personal communicators and mobile companions will more than quadruple to one million units by 1997 and then double to more than two million units by early in the next decade, according to a new study from Datacomm Research Co.
In “PDAs, Personal Communicators and Mobile Companions,” the company forecasts that successful products will look nothing like today’s models.
Datacomm President Ira Brodsky points out that several leading companies entered the market expecting instant success and have introduced a series of over-engineered products. “Wireless PDAs and personal communicators must be priced like a cell phone, not a notebook computer, and they must perform just one or two simple functions,” he said.
Brodsky believes the central task of these handheld computers will be communications, and because profit margins on the devices themselves will shrink, the biggest market opportunities will be for vendors that provide value-added information and communications services.
“While industry giants jockey for position, a cottage industry of information collectors and publishers along with communications services providers may emerge to grab the lion’s share of new business revenues,” the report said.
Datacomm forecasts a total U.S. market of more than $500 million by 2002 with the devices being adopted for vertical applications first, followed by horizontal business applications and, finally, after the turn of the century, the consumer market.
“The impact of PDAs and personal communicators will be even greater than that of the fax machine,” Brodsky said. “The ability for people to zap notes off to each other, regardless of location, will prove extremely compelling.”
The report notes several missteps in the initial rollout of handheld devices including too much attention paid to the pen-based handwriting recognition feature-a technology that has not yet advanced enough for widespread use-as well as an emphasis by manufacturers on artificial intelligence technologies to facilitate tasks rather than emphasize communications capabilities.
Because PDAs and personal communicators will find their first success in vertical markets, Brodsky believes a willingness to go through many product iterations to satisfy those niches is a critical success factor for vendors. Indeed, small entrepreneurial companies with innovative products or services may be first to find success, the report said.
