Misunderestimating the market

Pocketfactory - Does Bradley's Departure Signal A Changing Strategy For PalmOne?: "Colligan has been the driving force behind the Treo line, since his days at Handspring. He brings a lot of marketing know-how to the table. And it is in this capacity where his presence will act as a catalyst for Smartphone growth, provided he stays at this post permanently and not simply in an interim capacity. But at the same time his appointment could spell doom for the handheld line. PDA sales are flat. With Colligan's Smartphone centric background, he will undoubtedly use this opportunity to strengthen the company's Smartphone line while weakening PalmOne's dependency on traditional handheld sales, which is a declining market. What this company needs more than anything right now is to push further into the Smartphone segment with innovative new products, and entry level models."

Kent doesn't get what's really going on, so I don't think he's actually trying to lie here. While PDA sales did decline by 8.7% in Q3 2004, smartphone sales more than made up for the loss, but they aren't counted in the same category as PDAs by analysis groups like Gartner. Smartphones and PDAs combined continue to grow as a market.

And here's the part people like Kent don't understand. It really is the same market. PDAs and smartphones aren't really different products, or they are, but the same way cars and SUVs are different. They're different segments of the same overall market. PDAs aren't going way any more than coupes have gone way with the proliferation of SUVs on the road. There is a market for both types of devices.

If anything, the line between them will continue to blur as more and more PDAs incorporate cell radios and WiFi primarily for data communications. While a Pocket PC Phone Edition can be used as a cell phone, like a Blackberry it's less than ideal for that purpose. It's great for cellular data. We'll see a lot more of these devices, but they're still PDAs at heart.