2002: Year in Review

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It was another exciting year in the world of handheld computers. One company, Palm, split into two; two companies, Hewlett Packard and Compaq, merged into one; and a couple of others simply faded away. Devices became cheaper, smaller and simpler, but also more expensive, bigger, and more complicated. Yes, it was an interesting year.

The Palm Year

Tungsten TPerpetual market leader, Palm, Inc., survived another challenging year. It successfully spun off its PalmSource subsidiary, improving its long-term ability to attract and retain licensees of the Palm Platform. It also released a major new version of its operating system, Palm OS 5, finally catching up to Microsoft’s Pocket PC on the technology front. And it saw its long-term gamble on Secure Digital media and Bluetooth networking look like a solid bet. Finally, it launched a new sub-branding strategy with device families that target specific demographics, including the first-time consumer with the $99 Zire and the corporate road warrior with the Tungsten T. Expect Palm to fill in the mid-range with new models in 2003, as well as the wireless Tungsten W and possibly a smartphone too.

Meanwhile, Handspring forged an entirely new direction, opting to focus on the nascent smartphone market by teaming with Sprint PCS, T-Mobile and Cingular Wireless to launch its Treo communicators. Rather than continue to settle for 10% of the handheld market, Handspring hopes to capture 1-2% of the larger cell phone market along with its recurrent monthly service revenues. Still, it managed to surprise everyone with one last play in the PDA arena with its color Treo 90.

Sony finally did what everyone expected it to do when it first announced it was entering the handheld fray — kick butt. After stumbling at first, Sony gained more marketshare in 2002 than any other company. It accomplished it by using the same strategy that made its WalkMan audio player one of the most successful consumer products ever, releasing a half dozen new models covering every price range. Its newest model, the high-end Clie PEG-NX70V, set the standard in technical advances with its integrated digital camera, super high-resolution color display and dual expansion slots. The only big decision Sony faces in 2003 is whether to continue with its Memory Stick technology or bite the bullet and switch to Secure Digital.

The Pocket PC Year

In the Pocket PC world, we saw the emergence of personal computer giant Dell as a force to be considered. Its late 2002 entries, the Axim X5 Basic and Advanced, may not have raised the bar vis-a-vis technology, but they certainly lowered the bar when it came to PDA pricing — a Pocket PC under $200, who’d have imagined?

Toshiba continued its move to the top of the ladder with a trio of exciting and innovative Pocket PCs. Its e330 Pocket PC brought us the first ultra-thin Pocket PC since Compaq’s Aero, and it came with a sub-$400 price tag. But Toshiba’s bread-and-butter is clearly the full-featured handheld and its Genio e550g and e740 did not disappoint. The Genio e550g combined a fast processor, large display, and dual expansion slots, while the e740 became the first handheld with integrated 802.11b wireless networking. Toshiba’s only issue seems to be how to bring all of the latest technologies to a handheld while still achieving a full day’s battery life.

Two Pocket PC makers, Casio and UR There, did not fare as well in 2002. Casio silently abandoned the Pocket PC market after watching its share of the market tumble steadily over the past two years. It just never was able to return to the glory days of the E-100 Palm-size PC. Meanwhile, UR There suffered from quality issues that it just couldn’t resolve with its Taiwanese manufacturing partner, Compal. However, UR There’s founder, Brad Nolan, is now trying the same formula with Tablet PC (see his new venture at http://www.rosettatabletpc.com).

iPAQ H1910And let’s not forget about Compaq, or should I say Hewlett Packard. The HP-Compaq merger was one of the big stories of 2002 and its impact on the Pocket PC market was considerable. Gone was the Jornada, long the iPAQ.

By November, the marriage had been consummated, and the new HP released the first New iPAQ Models since the merger — and they didn’t disappoint. The iPAQ h1910 redefined thin in the Pocket PC world, while the h5450 took the iPAQ legacy to new heights, adding biometric security to the mix. Expect more new models from HP in 2003.

Then there were the Pocket PC Phones, including the HTC model marketed under the O2, T-Mobile and Siemens brand. While these devices showed promise, they weren’t the digital utopia many had hoped for, and Smartphones were STILL nowhere to be found, at least not in the United States.

Finally, Sharp released its Zaurus Linux-based handheld, which tempted some technophiles, at least from a distance. Despite its open source promise, we don’t expect Linux to make a substantial dent in the handheld market for the foreseeable future.

Well, that’s what happened in 2002. Are you ready for 2003?


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