HP Trumps Dell's PDA Entry

The rival PC makers gets set to duke it out in the handheld PDA space and analysts are expecting an all-out price war.
Posted November 18, 2002
By

Ryan Naraine

Ryan Naraine


Dell officially announced its entry into the handheld PDA market, lifting the wraps off a pair of Axim X5 devices running on Microsoft's Pocket PC 2002 software.

Dell's PDA plans, leaked in the press in recent weeks, puts the PC maker right in the Pocket PC thick of things, forcing market leader Hewlett Packard to release two new iPAQ models -- one matching Dell's $299 price point.

Even as the two powerhouse PC makers get set to duke it out in the PDA space, analysts aren't expecting a price war between Dell and HP. "Dell's pricing is very aggressive. They will definitely take away some business from HP. By the end of next year, Dell will be selling about 600,000 units and the chunk of that will come from HP's market share," said Aberdeen Group analyst Peter Kaftner.

"I don't expect HP to match Dell's aggressive pricing. People looking for a bargain will turn to Dell. But, that doesn't mean HP is giving up. With today's announcement of a high-end device for enterprise clients, it's clear HP will be a big part of this race," Kaftner told internetnews.com.

The Palo Alto, Calif.-based HP on Monday released two new Pocket PC devices - the low end ($299) IPAQ h1910 and the iPAQ h5450, a high-end device that integrates biometrics security, WLAN network access (802.11b) and Bluetooth wireless capabilities.

Kaftner said the HP devices add features that Dell doesn't have and creates new market segments in the space.

Jupiter Research analyst Michael Gartenberg agreed. "HP still differentiates at the high end with devices that add 802.11b, Bluetooth, a universal remote and Biometric security but all that comes at a price," he said, adding that the real head-to-head competition will be in the low-end (consumer) market.

"HP has no intention of giving up any ground to Dell but in the early 90s, people also claimed that no one bought PCs through the mail and only bought at retail. Underestimating Dell's ability to execute would be a mistake for HP," Gartenberg warned.

Still, Dell's aggressive pricing ($50 rebates through the Christmas shopping season) sets pricing high-end Axim X5 at radical levels, much lower than comparable devices from competitors like Toshiba, Casio and newcomer Viewsonic.

In an industry where the same components and manufacturers are used to produce comparable PDAs, pricing usually sets apart the players and analysts expect Dell to make quick headway

"Dell's entry reflects the maturity of the PDA space. With the price point Dell is targeting, they are quickly shifting the battle for the hearts and minds of consumers to prices previously unheard for Pocket PC devices," Gartenberg noted.

While Dell's move certainly boosts the Pocket PC market, Gartenberg believes the rapid commoditization of the Pocket PC platform will make it difficult for vendors to differentiate their products" and still keep price points low.

HP's low-end iPAQ h1910 touts 64 MB RAM, a secure digital (SD) expansion slot for additional storage, a removable slim battery and a synchronization cable.

HP said the high-end iPAQ h5450 handheld, targeting enterprise customers, it the first PDA to integrate biometrics security, wireless LAN and Bluetooth.

"A thermal biometric fingerprint reader helps to ensure that critical data is protected from unauthorized access. The fingerprint registration process authenticates the owner's unique fingerprint, allowing access with a simple fingerprint swipe. Users also are given the option to combine this with a PIN and/or password," the company said.

The iPAQ h5450 also offers VoIP software, wireless email and calendar access software, ad-hoc wireless file sharing and messaging and real-time setup and management of conference calls.






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