Smartphones miss out on PDA legacy

PDAs are on the verge of extinction as phones get more sophisticated — but users aren't moving to data-centric smartphones because ordinary phones are "good enough", according to analysts.

"There has been an evaporation of demand for handhelds," said Andy Brown, programme manager for mobile computing research in Europe, during analyst firm IDC's quarterly teleconference covering mobile devices in Europe. "We're likely to see handheld vendors withdraw from the market."

But although users are flocking away from PDAs, they aren't picking up smartphones instead. "Features phones are good enough for the majority of users," Brown said, adding that users rate the "aesthetics" of the device and multimedia features more highly than any data-centric functions included in high-end smartphone operating systems. "Cameras and multimedia functions are not discernable from the capability of smartphones, for most consumers."

The European market for "handhelds" (as IDC refers to PDAs), shrank by 49 percent over the previous year, said Brown. "Converged devices", an umbrella term under which it refers to smartphones, increased by 10 percent and traditional phones by 7 percent, but the smartphone increase was smaller than analysts had expected for an emerging sector that was expected to be the main beneficiary of the death of the PDA.

3G phones, on the other hand, have been performing the way emerging products should — leaping by 126 percent to make up 20 percent of the European market, Brown reported.

Nokia dominates smartphones, with around 75 percent of the market, said Brown, with Blackberrys and various Windows Mobile taking comparatively small chunks.

Although the Symbian operating system still leads — largely due to Nokia's dominance — Brown was a little less upbeat than Symbian itself, which announced its results yesterday. "Symbian's growth year on year was flat at 2 percent, as Windows Mobile vendors such as Qtek, Orange and O2 contributed to growth of 85 percent for Microsoft."

That figure might look good for Microsoft, but the handheld decline has hit the prospects of Windows Mobile, which IDC expects to reach around 30 percent of the smartphone market by 2010, compared with around 65 percent for Symbian.

Still, that's better than Palm: "Things look bleak for Palm," said Brown, blaming its problems on the withdrawal of the Treo 650 due to European regulations on toxic substances, and its poor track record for new product delivery.