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Why DELL's entrance into the PDA market is significant...and good even if you don't have one...yet.
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Dell has finally entered the PDA market with the DELL AXIM X5. While the X5 is a solid performer and has a number of admirable features for a PocketPC unit, such as the inclusion of dual expansion slots, rich transflective screen, and superior power reserve/management, it is not the features of the unit itself which is most significant. On paper, the specs aren't anything unique or anything which would drastically separate the Axim from the rest of the PocketPC offering or cause a stir in the industry until you get to two things.....the price and the prominence of the company offering it at that price.
At $249 (and lower with rebates and discounts) for the X5 Basic, consumers who were wary at dipping deep into their wallets for a new PocketPC are reconsidering taking a bit shallower plunge. Likewise, for the first time, there is a price-performance ratio sweet enough to tempt PALM users to switch from the simple comfort of their PalmOS to the media-empowering, robustness of PocketPC. (See PDA OS's Article)
If Dell chooses to continue such an offering, the natural result will be to pressure other PDA "manufacturers" to lower their prices or risk losing market share. Pricing is the least favorite attribute for companies to use to differentiate their products, as it runs counter to the basic goal of business. There is no glory in a discount. So, PDA vendors will look to accelerate the timeline for adding improved features in order to command a price premium (and the corresponding profit margin) over the baseline units. Lower prices AND more functionality...it's a technophile mantra. Who knows if Dell is actually making a profit off of the X5? Many speculate ( and the competition must surely hope) that Dell is taking a hit on the X5 in order to gain market share, intending to make it up on more expensive offerings with slimmer form factors ( X3?) or more advanced features like increased memory and integrated wireless (X7?). (See What's Coming and Wish List Article) As with the personal computer, the "commoditization" of the PDA will lead all vendors to add products and services to their offerings in an attempt to differentiate themselves from their competition.
Note, there are already several manufacturers who have lower priced PocketPC's in the works. And Dell is rumored to have a upcoming PocketPC without the compact flash slot priced about the $150 mark.
The greatest potential lies with Dell being an n-tier vendor, rather than a one-shot, "me-too" device manufacturer. Seeking to leverage a greater synergy of its products, it is natural for Dell to accelerate its integration of the PDA into the enterprise level solution, which Dell has been increasingly looking towards for growth. HP is the obvious target, having been the only other PDA company really positioned to offer a complete end-to-end. The lack of competition, and perhaps merger issues, seemed to have sapped some of their initiative. But, the introduction of the Ipaq 5450 suggests that HP will not yield the high ground quietly. Coupled with the growing availability of higher speed wireless networks and public access points, as well as the maturing (albeit painfully slowly) of web services technology, the utility of the pda (and other "enabling" devices) is poised to expand tremendously. IBM's recent pda announcements of a self-branded Linux-based pda indicate that they are ramping up their efforts in this area as well. (See PDA's and the Enterprise Article)
The net result should be a lot more consumers using pda's and a lot more vendors offering new related products and services (some even at a reasonable price.) HURRAY!!
Ok sure, all of this is obvious to anyone with a little common sense and a working knowledge of technology and free market economics. But with all the "new" business paradigms, dot whatever flubs, earnings restatements, bankruptcies, lawsuits, "renewed" business paradigms, consolidations, layoffs, etc. over the past few years, it's reassuring to see the economic engine actually produce a straight-forward benefit to the average consumer.
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