Will Dell Succeed in the Pocket PC Market?

Will Dell Succeed in the Pocket PC Market?

Most pundits predict enormous growth in handheld computing over the next decade. After all, a handheld device is cheaper, handier, and almost as capable as a PC. Strategy Analytics estimates that the global handheld market will grow from 4 billion dollars today to 17 billion in 2007. Dell and other manufacturers sense a huge market opportunity.

For the past six years Dell has watched on the sidelines as HP, Casio, and Compaq partnered with Microsoft and introduced many generations of handheld devices. During that time, technology advanced, built-in software improved, and the cost of parts decreased. In those six years, thousands of software and accessory products have been developed to support the Microsoft Pocket PC platform. Dell saw that the time was right and introduced two new low-cost Pocket PCs.

Naturally, Dell would like to help grow the market and become a dominant Pocket PC manufacturer, as it has with the PC. Dell's strategy is simple and plays to its strengths: keep costs down, offer a strong unit at a great price, sell its devices using Dell's direct sale marketing machine. Pocket PC market leader HP has a higher internal cost structure than Dell, and Dell senses vulnerability.

As you can see from Rich Hall's review on page 12, the Dell $200 and $300 Pocket PCs are strong offerings. I recently heard a Gartner prognosticator predict that Dell could soon gain 30% of the market. Despite all these positives for Dell, I'm skeptical.