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PDA Sales Slowing as Cell Phones Add Features
Jun 3, 2004
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Japan-based Sony Corp. said that it plans to stop selling its Clié PDAs in the U.S. -- said to be a big blow for the already shrinking PDA market.

A new line of Cliés planned for the fall will be sold only in Japan. Sony said that it is focusing instead on its cell phone business run through a joint venture with cell phone maker Ericsson of Sweden.

Sony's withdrawal from the once-booming market may indicate how quickly PDAs are flaming out, technology analysts say. "It's not really the space that it once was," says analyst Cindy McCurley with In-Stat/MDR.

PDAs, or personal digital assistants, were one of the hottest products of the tech boom. Manufacturers couldn't keep up with demand for the hand-held computers, which store phone numbers, calendars, work tools and games, and convert handwritten notes into typed text.

But sales have been falling since 2001, hruting PDA companies. Last year, former giant Handspring was acquired by rival Palm, which has since changed its name to palmOne. Gateway and JVC both abandoned PDA plans, IDC analyst Alex Slawsby says.

Possible reasons for the PDA market decline include the following:

  • Cell phones have gained many PDA-like features. Technology improvements mean manufacturers can cram address books, calendars, MP3 players, and other features into increasingly tiny phones. Many consumers are choosing to carry these "smart" phones instead of a phone and PDA. This year, smart phones will outsell PDAs for the first time, Gartner analyst Todd Kort says.

  • PDA owners don't upgrade. Customers who buy a PDA usually stick with it until it breaks instead of buying a new one when new features come out, Mr. Slawsby says. That means the market for high-end PDAs is saturated. New PDA users tend to be less tech-savvy than early adopters, and consequently buy cheaper models, Mr. Slawsby says.

  • There are also other factors contributing to Sony's decision, analysts say. The company is streamlining product lines as part of a reorganization. It's facing increased competition from HP and Dell, which sell PDAs to have a complete product line rather than to make money. Research In Motion's BlackBerry e-mail devices are also stealing share from more traditional PDAs. (USA TODAY)

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