Why the Handheld Computing Market Isn’t Dying

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The handheld computer market is dead. Sales of traditional PDAs are tanking, the market is shrinking, and smartphones are the wave of the future.

Well, not quite.

If you follow the news of the handheld computing world at all, you’ve probably heard this before. Trumpeting the approaching world domination of all things smartphone has been the most popular pasttime for pundits, professional and amateur alike, for quite a long time now. If I had to put a date on it, I would place it towards the end of 2003, when the Treo 600 made its debut, accompanied by a massive PR campaign by then-merging manufacturers Handspring and Palm. Ever since that time, it’s been almost impossible to go a day without hearing someone saying virtually the same thing: handhelds are dead, smartphones are the future, and that soon we’ll all be picking at tiny keyboards, or inputting text via a numeric keypad in between doses of arthritis medication and finger de-knarling appointments.

Since when?

There’s no question that the number of connected devices is on the rise, and that as the mobile computing platform matures connectivity is becoming more and more important. But what I would like to know is where this idea that smartphones are the be-all and end-all of technology originated. Because whoever came up with it first, that person needs to be smacked.

Let’s start with the basics. There are some great smartphones on the market. There are also some real turkeys. That’s the nature of the market. In a healthy market, the great–or at least acceptable–devices outnumber the turkeys. This is not the case in the smartphone market. Vast numbers of “converged” devices have ended up top-heavy, woefully deficient in phone functionality, or computing versatility, or both. Legions more have died on the vine, either because no carriers wanted them, or because the manufacturer couldn’t handle the technological equivalent of threading a needle in an open convertible while doing 120 miles per hour through a snowstorm somewhere in the Swiss Alps.

One of the very few success stories coming out of the smartphone market is the Treo. While by and large, early Treo versions flapped and gobbled with the worst of them, Handspring struck pure gold with the design of the Treo 600. Handspring’s acquirer, Palm, then jumped on the turkey gravy train, and began crossbreeding lame puns with mixed metaphors to create a new super-race of literary faux pas capable of causing near-fatal wincing and eye-rolling at 100 meters. And now back to our regularly scheduled article.

Ever since, the Treo line has been considered to be the de facto standard for smartphones–a device capable of being both a phone and a computer without fatally compromising either. Take note of that balancing act, though–the Treo has never been touted as the best of both worlds, but as a device capable of handling both tasks reasonably well, something that the pretenders can’t do.

Sooner or later, however, the turkeys will end up on the dinner table, and the market will get a handle on the technology, allowing manufacturers to create cutting-edge, dependable smartphones, right? Well, yes and no.

The realities of design and distribution impose a certain set of limitations onto smartphones. Designing a combined phone and handheld computer means that you have to make sacrifices that you wouldn’t on a traditional handheld.

Thence comes the problems with distribution. While FCC approval is necessary for any radio-emitting device to be sold in the United States, testing and inspection is considerably more rigorous for mobile phones. This adds delay to the development of a smartphone, and in the computing industry, delay means that something newer just blew past you on the Autobahn. More delay comes in the form of the wireless carriers. They too insist on testing and having input on new devices, and customizing them for their service. From drawing board to carrier launch, it can take a smartphone anywhere from 12 to 18 months to materialize. And when it does, it’s still the same hardware, now 18 months older, going up against non-phone devices that are only a few months old.

All this adds up to one thing: smartphones are inherently behind handhelds technologically. One school of thought says that this doesn’t matter–that as long as smartphones are good enough, they’ll supplant handhelds as the tool of choice.

The popularity of the Treo would certainly seem to bear this out. The Treo has never been a ground-breaker on specifications, nor has its rival the Blackberry. Yet smartphones and mobile communicators are all the rage, particularly with the business crowd. At the Consumer Electronics Show 2005, you could barely throw a rock without hitting someone carrying a Treo or a Blackberry. Believe me, I tried it, and it nearly got me sued.

But appearances can be deceiving. While the Treo is very popular, and hardly a day goes by without some news about HTC’s famous line of PocketPC phones, traditional handhelds still outsell smartphones by a very wide margin. It’s been said for years that handheld sales are tanking, and smartphones are taking over. Smartphone sales have grown, but not nearly the way that prognosticators said they would. And at the same time, many makers of traditional handhelds have also been enjoying increases in sales.

Which brings me to my last point, and the real core of the issue. A fact that very few people acknowledge is that smartphones and handhelds are truly two parts of the same thing. They are both citizens of the handheld computing market.

Imagine for a moment, three devices. A $49 Camera Phone from Radio Shack, a Treo 650, and a traditional handheld. Compare the three. Many of the people pushing the smartphone-conquest-of-Earth theory would place the Treo and the Camera Phone together, because to their minds the devices are both phones. But if you take a minute out an look, you’ll notice that they have very little in common with each other. The Treo is a true mobile computer, with the power and flexibility that implies. The $49 phone is, well, a phone. It places calls. It likely also sends text messages, and downloads overpriced ringtones that make bystanders want to murder the phone’s owner. Not only is it not in the same league as a Treo, it doesn’t even play the same sport. The traditional handheld, however, has a great deal in common with the Treo. They’re fully capable computing platforms, designed for the needs of serious users, and far more powerful than any simplistic phone ever could be. And the smartphone market is moving even further away from the tacky, limited functions of mobile phones, and towards being more complete computers, with WiFi, high resolution screens, and other features once disdained by smartphone evangelists as unnecessary and irrelevant.

It’s easy to classify devices like the Treo as a “phone” and leave it at that. But such simple black-and-white lines divide what is in reality a single diverse market. The numbers of connected devices are rising, and advances like the HTC Universal and Voice-over-IP are threatening the already blurry line between smartphone and handheld. The bottom line is this: Handheld computing is handheld computing, whether the device is a traditional handheld, a smartphone, or a Blackberryesqe mobile communicator.

Any smartphone worth the name is far more a handheld computer than it is a cellular phone. To say that smartphones will replace handhelds is like saying that two-door sedans will replace cars. Even if, tomorrow morning, every device shipped with a cellular radio, the handheld computing market would still exist. It might look a little different. But then again, it might not.



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