PDA to buy?
The history of handheld devices is short but successful, yielding unit sales of over $436 million in 1999, which are expected to double for 2000. Since the two leading vendors in the industry, Palm and Microsoft, launched their handheld operating systems (OS) in 1996, there have been three revisions of Microsoft, and Palm has assembled a device line of four major product series. The fundamental difference between Palm and Microsoft is that Palm licenses its OS and carries a line of handhelds, while Microsoft's PocketPC provides an operating environment for hardware manufactured by other companies such as Compaq, NEC, HP, and Casio.
Palm with dominating market share numbers. PalmOS-based devices, namely Palm's own systems, have historically dominated market share for years. According to NPD Intelect, in August 2000, Palm devices held 70.3%, Handspring 15.5%, Compaq 6.6%, Hewlett Packard 1.7%, and Casio 1.4%. Combined, handhelds based on Palm OS carry over 85% market share, while PocketPC devices are a distant second with approximately 10% market share. However, PocketPC-based devices are making a move. With Compaq's new iPaq product, introduced in July 2000, Compaq has sprung from negligible market share into third place behind Palm and Handspring. Also, Microsoft's recent initiatives may propel a larger user base towards PocketPC.
Wireless connectivity is a near–term priority. The near–term goals for PalmOS, PocketPC and their competitors are based on the need to capture and maintain market share. Importantly, these companies are focused on snaring corporate users with their new wireless efforts. Even though Palm is currently ahead with its integrated wireless offerings, Microsoft has recently announced a large speech and mobile access infrastructure initiative. Besides developing infrastructure, other wireless priorities include partnering with mobile service providers, modem, and other hardware vendors.
Handhelds for Healthcare. For many corporate markets, simplicity, price, and functionality override the need for more extensive multimedia features. However, in healthcare and other markets, the requirements are more complex, particularly since the device must service many functions. Extended battery life and operating power are also key characteristics of a good healthcare handheld, but in addition, flexibility and multimedia options are similarly important. Since handhelds are used in healthcare to address a variety of needs, from e–-prescribing to lab results to e–detailing, different features are required to fulfill each of the different needs. Physicians must carry handhelds around all day on their rotation, thus the handhelds must be compact and weigh as little as possible. In the future, multimedia should become increasingly important, as advanced protocols and other technologies develop, allowing physicians to fully utilize the convenience of speech beyond dictation.
Emerging technologies: Smartphones. Among the many rival devices to PDAs, smartphones, wireless phones with integrated PDAs, are playing a dominant role in device manufacturers' efforts. Although Symbian OS is emerging as the worldwide leader with its integrated wireless technology interface, security, and support for voice and multimedia applications, PalmOS and PocketPC are making their moves to partner and expand their capabilities. As smartphones develop and more services are made available, these devices may become very useful to healthcare, but currently palm–sized handhelds are better options due to the greater quantity and quality of available applications, as well as their superior integration capability with wireless LANs.
Operating System Summary Matrix
Best PDA for power users focused on maximizing basic personal information manager (PIM) functionality and mobility (tend to weigh less)
Many companies utilizing Symbian technology in their equipment, including Ericsson, Matsushita Electric, Motorola, Nokia, Philips Electronics, Sony and most recently, Sanyo
PalmOS-based handhelds tend to be smaller and lighter than their PocketPC-based counterparts. While they have less power and memory, Palm and other compatible third-party applications generally require lower system resources, so battery life on these handhelds are longer on average.
Selected Palm-Based Handhelds
Palm III series, (later release:IIIxe) 3/98,
Palm IIIc 2/00 Improved color display, good lighting
Palm VII series 12/98 Integrated wireless connectivity, Palm.Net service
Palm V series 2/99 Most portable palm model, light
Handspring Visor 3/00 Plug-and-play Springboard slot
PocketPC-based devices generally have larger, color displays with better lighting and resolution than PalmOS-based handhelds. PocketPC handhelds have greater multimedia support—these are typically equipped with Microsoft Media Player, and hardware such as microphone, speakers, and a stereo ear-phone jack. In addition, these devices boost greater memory, faster processor speeds, and enhanced storage capacity.
Selected Windows CE/Pocket PC-Based Handhelds
Compaq iPaq H3600 series 4/00 Fast processor (206 MHz)
Casio Cassiopeia E-100 5/99 Many multimedia features
NEC Mobile Pro 4/00 Large display
HP Jornada 540 series 2/99 Great CompactFlash card that can hook up many devices
HP Jornada 680/690 3/00 Large display
Josh C. Fisher is a Senior Analyst with WR Hambrecht + Co. Prior to joining WR Hambrecht + Co, Josh Fisher worked in equity research at Volpe Brown Whelan & Co. and Montgomery Securities (now Banc of America Securities), focusing on the eHealth, pharmaceutical services, and managed care industries. Josh also worked at Columbia/HCA in the managed care division. Josh graduated with a BS in Economics and Pre-Med from the University of California at Berkeley.