The Latin American PDA industry grew 13.8 percent in the second quarter of 2002, with shipments up from 103,505 units the year prior to 117,757 units, according to Dataquest Inc., a unit of Gartner, Inc. The firm expects Latin American PDA shipments to grow 14.6 percent in 2002, and analysts believe sales will increase as users in the region begin to learn the capabilities that are possible using a PDA.
“This is an industry in Latin America needing extensive market education at the corporate and consumer levels,” said Luis Anavitarte, vice president and research director for Gartner Dataquest’s Latin America group. “Nevertheless, things are on the right track particularly with the development of vertical market applications. Investing in market education is a tough call for vendors at the present time, but sales will strongly pick up once the markets are fully aware of how a PDA will solve their requirements.”
|Latin America PDA Vendor Unit Shipment Estimates for 2Q02 (Units)|
|Company||2Q02 Shipments||2Q02 Market Share (%)||2Q01 Shipments||2Q01 Market Share (%)||Growth (%)|
|N/A = Not applicable
Note: Hewlett-Packard results include shipments by Compaq. Gray market not included.
|Source: Gartner Dataquest (September 2002)|
Palm was the undisputed leader, capturing more than 68 percent of the market, and Anavitarte attributes their success to Palms focus and aggressive regional application development program. Anavitarte expects the competitive landscape to change upon Dell’s entrance to the industry, and the emergence of Microsoft’s PDA operating system to the region.
“Market uncertainty about the outcome of Hewlett-Packard’s acquisition of Compaq and its product lines, more than market dynamics themselves, partially explain HP’s lower PDA sales in the second quarter of 2002,” Anavitarte said. “Price positioning and competition from Palm were also important variables. Things should stabilize for the remainder of the year, particularly with more aggressive vendor marketing in light of new local players, such as Itautec from Brazil and Alaska from Mexico, entering the PDA industry with Pocket PC devices.”
Mexico was the leading country in the region with 50 percent of PDA market share in the second quarter of 2002, followed by Brazil with 31 percent of the market, and Chile with a market share of 3 percent.
On a global level, Gartner Dataquest projected that 15.5 million PDAs will be shipped by the end of 2002 – an 18 percent increase from 2001 shipments of 13 million units – but Strategy Analytics predicts the worldwide PDA market to post a modest 9 percent increase in 2002, eventually growing to US $17 billion in 2007.
Despite marginal growth, Strategy Analytics forecasts profit levels to decline by almost 20 percent from 2001’s figures.
“The PDA market has seen the aggressive entry of a group of vendors who are accustomed to the razor thin margins of the PC world,” states Chris Ambrosio, director of the Strategy Analytics Global Wireless Practice. “As a result, margin pressure is greater as all seek to compete for the same few customers. Corporate customers are not yet adopting wireless mobility on a broad scale, but there is light at the end of the tunnel.”
Strategy Analytics theorizes that reduced corporate IT spending levels are expected to restrain the market well into 2003, and will continue to drag on PDA shipments. However, revenues will continue to grow as Pocket PC vendors increase their market share in 2002, and approach 33 percent in 2003.
Individual purchases accounted for three-quarters of 2001’s PDA sales, and consumers are expected to purchase 60 percent of the PDAs sold in 2003, as businesses slowly realize the increasing value of the handhelds.
“The increasing capabilities of these devices and the growing availability of wireless technologies are beginning to stimulate large corporate purchases as solid productivity gains are realized, based on applications such as wireless email or accessing corporate databases from remote locations,” said Todd Kort, principal analyst for Gartner Dataquest’s Computing Platforms Worldwide group ”
Strategy Analytics also found that PDAs with integrated cellular connectivity will account for 59 percent of total PDA sales in 2007, and the prioritization of WiFi services has relegated Bluetooth to secondary consideration in the PDA market, with only one third of PDAs expected to offer integrated Bluetooth in 2007.
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