Psion PSection

How smartphones will save the handheld market

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By Mark Esposito
February 1999, issue 26

The New Year is upon us, and there is good reason for a re-examination of the handheld industry. While we carry the information of our lives in our pockets, the rest of the world just looks at us, still thinking that our handheld is some kind of glorified calculator. At least here in my neck of the woods I still get those kinds of responses when people see my Psion. This serves as a great introduction to a look at the handheld market for 1999. It's a market still in the dark in many ways, but there is some light on the horizon.

Recently we have seen huge changes in the handheld industry. Some of these changes relate to Psion, others relate to their competition. To start out, the Newton was discontinued. This was a shame, because the Newton was finally working and it offered an alternative to the traditional way of doing things. Choice is always better. Alas, we are left with only the PalmPilot, Windows CE, and Psion.

Who is going to survive and why
It is very interesting to me that the manufacturers of Windows CE machines seem to be abandoning the Psion Series 5 form factor, which was the form factor of all early Windows CE machines. They were all semi-pocketable "clamshells." I admit that the direction they have taken boggles my mind. They are moving up very close in size to the sub-notebook class. This means to me one thing: that they are not selling enough machines in the pocketable size, so they are testing the waters with other form factors. The problem they have is that Windows CE can't run Windows 95/98 software. As long as there isn't a Windows CE version of all popular software, Windows CE is not going to threaten the sub-notebook market. With machines out there such as the Libretto, a real Windows 95 machine, selling for nearly the same price, I can't see how Windows CE can compete. Mine isn't a unique opinion. Many journalists on the PC side are saying the same thing.

Where does this leave us? It leaves us with Psion in the pocketable keyboard-based computer category, and others in the smaller non-keyboard category. Is that the end of the story? It is just the beginning.

If I can be so bold as to come to a conclusion about traditional handheld computers for the consumer in 1999: it's a small piece of a bigger pie. That's not easy to say for someone who writes software for Psion platforms, but it is reality. In a nutshell, here is what I think has happened: Psion has the most usable, well-rounded handheld on the market, and if Psion were Microsoft, we wouldn't be having this discussion right now. Why? Because people would have gone out and bought Psions in the millions and, since the machine actually works, it would have been a smashing success. However, it takes a lot of money to market a product to the world, and Psion never had the money to do it.

Bad press
The other guys that did have the money came along with inferior products; people bought them, told their friends how bad they were, and returned them. What then happens to the market? It goes sour, and people are afraid to buy yet another piece of hardware that isn't ready for prime time. My conclusion then is that the Psion Series 5 sized machine is going to sell in only moderate numbers for some time to come for reasons that have little to do with the merits of the machines. It's not a question of who has the best widget, but who has the money to convince others that theirs is the best.

What about being the small piece of a bigger pie? Well, the single biggest move of the year was the formation of Symbian. Now jointly owned by Psion, Nokia, Ericsson, and Motorola, this, I believe, is the future of handhelds. Psion has positioned itself just perfectly for the future. When I say it is the future of handhelds, I really mean the handheld OS (operating system). Instead of developing an OS totally dependant on its own hardware, Psion developed an OS that would be lean and run on a variety of devices. The fact that these companies chose EPOC as the best OS to take them into the future is strong validation for Psion and EPOC. Of course, Bill Gates had the same strategy with Windows CE, but Windows CE wasn't selected as the OS for the products that these cellular phone giants would produce. If you haven't already guessed it, the smartphone is the handheld device of the future.
Before I get you Series 5 die-hards too nervous, there will always be at least two devices. Symbian calls them smartphones and communicators. The communicator is a larger device with keyboard, which is the class a Series 5 falls into. While this device hasn't turned the world upside-down, and probably won't, it is a valid class of machine for many of us that want greater functionality and a keyboard. The smartphone is the mass-market device of the future, and will eventually represent a big part of the cellular phone market. For many users the question will be "Why purchase a Series 5/Windows CE/Palm when my phone has all of the same functionality built-in?" Since not everyone requires a keyboard, it would be logical to carry only one device that does it all. The trade-off is that you lose the keyboard and many users do too much typing to give it up. If you need a keyboard, you can buy a Series 5-type machine with built-in mobile phone capabilities. If you don't need a keyboard, you will buy a smartphone with full wireless data capabilities. Of course, success rests on the build-up of the wireless networks world-wide, but that is in progress.

Profits, or the lack thereof, have forced the handheld OS into an arena where it can make money. Interestingly, it is Psion that appears to have won the small OS war for the smartphone. That will translate into newer and better communicators for those of you who need a keyboard.
Ultimately, this is all very positive for Psion users. We all thought that it was our device that would convince everyone they needed a handheld. In the end, it will be the smartphone that will do this, and we'll be carried along.

Mark Esposito can be reached via e-mail at mesposito@pencomputing.com.