Wobbling PDA sellers toughen up

Personal digital assistant (PDA) vendors are flexing their muscles and developing new applications and distribution channels to boost sales of the handheld devices in Taiwan, PDA companies said yesterday.

"The global PDA market appears to have slowed down as new gadgets with integrated functions like smart phones are increasingly eating into the PDA segment. The key is lack of killer applications," said Marty Kung (龔俊光), an analyst at Market Intelligence Center (MIC, 資策會).

MIC predicted that global shipments of PDAs will slide to around 11.4 million units this year from 12.2 million last year. The growth in this industry will be very minimal, as the industry is moving into a mature phase, Kung said.

In a report released in October, the international research house IDC said the worldwide market for handheld devices grew in the third quarter of this year.

Device shipments rose by 1.1 percent year-on-year in the third quarter and increased by 9.4 percent from the previous quarter to 2.37 million units, IDC said.

But IDC predicted the growth will be unsustainable.

"Unless holiday season demand proves particularly positive, the handheld device market will decline more steeply in 2003 than in 2002 as it returns to 2000's level," IDC said.

To combat the downward pressure, Mitac International Corp (神達電腦) is pitching PDAs with extra services in the Greater China market and developing new retail channels in Taiwan.

"In an attempt to get rid of the shadow, last month we rolled out our first PDA, Mio168, with embedded global positioning system [GPS] service," said Mitac spokeswoman Justine Liu (劉怡君).

To boost sales and brand names, Mitac began early this month to distribute its latest PDA at Family-Mart Co's (全家) 1,500 convenience stores, in addition to traditional computer and electronic retail channels run by Synnex Technology International (聯強) and Tsann Kuen 3C (燦坤).

"So far, sales of the new model have far exceeded our expectations," Liu said. Mitac originally set a target of selling 2,000 Mio168s but has sold nearly 5,000 units as of yesterday. The company sold about 300 such devices at Family Mart, she added.

Handheld computer maker PalmOne Inc yesterday also launched its new PDA model T3 equipped with a GPS option. The company said it expects the local handheld computing market to remain flat this year and could have a chance to see slight growth next year amid an economic recovery.

But PalmOne is still gauging the feasibility of selling its PDA products at convenience stores, said Jim Tsai (蔡進明), a sales manager of PalmOne Asia Pacific Ltd.

"Higher cost and inventories will be our top concerns when thinking about selling our products at convenience chain stores," he said.

Consumer's purchasing habits are also a concern, Tsai added.

"Without detailed introductions of IT products like at computer and electronics retail stores, consumers lack of a strong motivation to buy a high-price product like a PDA, not to mention paying in cash."

Mitac's Mio168 and PalmOne's T3 are retailed at about NT$12,000 and NT$14,300 respectively.

Hewlett-Packard Co, the world's largest PDA vendor, said Taiwan's retail channel is not the major venue for the company to sell its handhelds.

"It is not a long-term and stable way to sell information technology products at convenience stores, which usually sell those products along with others in a special promotion," said Frank Hsu (徐寶旺), a marketing development manager at Hewlett-Packard Taiwan Ltd.