Wireless Access Devices Look Toward 2001

Total sales of PDAs reached 6.1 million units in 2000, a nearly 50 percent increase over 1999, according to a study by the Consumer Electronics Association (CEA). Sales for 2001 are expected to grow by another 57 percent to a total of 9.6 million units.

CEA’s “PDA Owner Profile” study, which was conducted via Internet Web form among 649 adult PDA owners during December 2000, found PDA owners to be wealthy, highly educated and mostly under the age of 55. Slightly more males than females own PDAs, and the owners are overwhelmingly wired to the Internet. Ninety-three percent of PDA owners surveyed have Internet access at home, compared to 58 percent of the general adult population.

While PDA owners are widely considered to be tech-savvy consumers, the CEA survey found that only 53 percent of the respondents purchased their PDA for themselves. More than one-quarter (27 percent) received the product as a gift, while another 20 percent received their PDA from their employer. Among the respondents who purchased the PDA themselves, the most popular reason was to “make life easier,” while only 6 percent said it was because they wanted the newest technology. PDA owners also seem to appreciate the functionality of the devices. Most respondents (70 percent) said their PDA simply helped them “keep things organized,” while 61 percent said it is “fun to use,” and 37 percent said it was “vital to their functioning efficiently.”

Ninety percent of the survey’s respondents said they use their PDA at least once a week, while 60 percent said they use it every day. In addition, 81 percent said they carry their PDA with them “all or most of the time.”

As might be expected, PDA owners report a high level of owner satisfaction with the devices. Seventy percent said they are “very” or “somewhat” satisfied, while only 11 percent expressed dissatisfaction. The areas PDA owners most want to see improved are the view screen, battery life, and ease of inputting data, all of which managed to receive a satisfaction rate of more than 50 percent.

When asked what improvement they would make in their next PDA, 27 percent said they would opt for a wireless modem. Only 11 percent of current owners surveyed had a wireless modem, and only half of these individuals subscribe to a service that allows them to use the function. When those respondents who were either neutral toward or interested in wireless Internet access were asked how likely they would be to subscribe to a service for $20 per month, only 17 percent of current owners said they would be likely to subscribe.

Mobile phones, the other devices that are trying to become the preferred method for wireless Internet access, had worldwide sales totaling 412.7 million units in 2000, according to Gartner Group’s Dataquest. Unit sales in 2000 represented a 45.5 percent increase over 1999.

Persistent rumors of a market slowdown in the mobile phone industry did start to prove true toward the end of the year, according to Bryan Prohm, Dataquest senior analyst in the worldwide telecommunications group. “The afterburners that propelled several years of consistently high growth rates now suddenly seem to have been switched off,” Prohm said. “Indeed, there is some significant stock carry-over to the beginning of 2001, meaning the number of total shipments in 2000 was about 6 million units lower than previous estimates.”

Nokia remains the No. 1 vendor in the mobile phone market. Its 2000 shipments grew 66 percent over 1999, and the company also had strong second half in 2000 when 59 percent of its sale of the year occurred.

Dataquest analysts said 2000 was a transitional year for the mobile phone industry, as a number of issues affected its growth: global capacity caught up with demand; lowered barriers to entry allowed an influx of smaller manufacturers that were able to exploit demand in Far Eastern markets like China; and WAP failed to impress savvy mobile users. Mobile operators also began to shift attention away from straightforward subscriber acquisition to a greater focus on lifetime customer loyalty.

“The long-term prospects for the mobile sector look tough,” said Peter Richardson, principal analyst for Dataquest’s worldwide telecommunications group. “Few manufacturers are able to generate healthy profit margins, placing the necessary investments in next-generation handsets developments at risk. The smart money can be riding on players that are unfamiliar with the upper echelon vendors.”

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