Is Toshiba Exiting the Handheld Market?

by Reads (37,731)

T.S. Eliot described human life as ending “not with a bang, but with a whimper.” It seems the same can be said about the life of a handheld computer line. While companies proudly announce their forays into the world of PDAs, few send out press releases when they leave.

Take Philips for example. Back in 1998, it launched the Nino Palm-size PC, claiming it would take handheld computing to a new realm. It didn’t, and less than two years later Philips quietly called it quits.

Now it appears that Toshiba may be doing the same, at least in the U.S., where Pocket PC sales aren’t as strong as in Europe. While Toshiba tersely denies it, several industry insiders have speculated to Brighthand that it has either quietly withdrawn from the U.S. market, or intends to do so later this year, pointing to several factors as evidence. For one, several corporate workers have reported that they can no longer order Toshiba handhelds through corporate purchasing channels. For another, while talk of new devices from HP and Dell (expected in June) have begun to make the rounds, Toshiba is silent regarding any possible upcoming Toshiba models (although there have been rumors of an e830).

From a business perspective, Toshiba’s exit would make perfect sense. After all, handhelds are a contracting rather than growing market and Toshiba’s slice is shrinking disproportionately. According to market research firm IDC, while the worldwide market for handheld devices declined 12 percent in the first quarter of 2004, Toshiba’s share lost more than 25 percent, dropping to 2 percent of the overall market, fifth behind palmOne, HP, Sony and Dell. So maybe Toshiba is simply following ex-General Electric CEO Jack Welch’s philosophy that if you’re not top dog (or at least runner-up) in a market, get out.

Or maybe there’s the wild possibility that Toshiba is planning a switch from Pocket PC to the Palm OS and is designing new models based on Cobalt, the upcoming version of the Palm operating system. While Toshiba denies it is considering a switch, it should be noted that it originally sought to go with Palm OS rather than Pocket PC but was rebuffed by Palm, which feared losing another substantial slice of its hardware marketshare (as it did with Sony). That’s no longer an issue now that Palm has split into PalmSource, the OS unit, and palmOne, the device unit. PalmSource would be more than happy to convert a major Pocket PC player.

Will it happen? Will Toshiba quietly bow out, as did Philips (and Everex and Uniden and Casio)? Or will it become the first major handheld maker to jump ship from Pocket PC to Palm OS? Time will tell.

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