Time to get to grips with hand-helds
New converged hand-held devices and smartphones are becoming big business. But getting your business customers to bite will take decent solutions and new partners. Martin Lynch investigates
New converged hand-held devices and smartphones are becoming big business. But getting your business customers to bite will take decent solutions and new partners. Martin Lynch investigates
Notebooks might be the darlings of the channel catwalk at the moment, but there is a whole army of smaller mobile devices that are fast catching the attention (and cash) of IT managers. The new generation of mobile hand-held devices, which broadly encompass a variety of PDAs and smartphones, have started to take off in the business world, thanks to a heady mix of features. These include email, personal information management (PIM) functionality, wireless LAN and mobile support for key front- and back-office applications.
We are not really talking about traditional PDAs, which over the years have had a hard time of it. A traditional PDA (or hand-held, as it is now referred to be the experts) is one with no voice capabilities, although some may have internet access.
According to IDC’s final stats for 2004, the PDA market racked up its third consecutive year of declining sales. Overall, 9.2 million units were shipped in 2004, a decline of 1.4 million (13 per cent) from 2003. It marked a five-year low for the PDA sector, where sales have not fallen below 10 million units since 1999. To top it all off, the world’s number three player, Sony, shocked everyone last summer when it quit the PDA sector and stopped selling its Clie hand-helds in the US and Europe.
Even if you discount the dismal 2001 to 2003 period of economic depression, PDAs were in trouble. With the arrival of a new breed of devices, they still are, but at least now the old PDA is getting a much-needed makeover. The stars of today are the wireless hand-helds such as the Blackberry, and smartphones. The arrival of voice-centric smartphones from the world’s biggest mobile phone operators has turned the market on its head.
Running operating systems from either Symbian or Microsoft, these devices have elevated mobile phone technology into the data-centric device market, which was once dominated by PDAs. Mobile phone makers and operators can smell the cash to be made from convincing businesses that their next phone upgrade should be a smartphone. All of this is very good for them, but where does it leave the channel in the mobile device chain?
Broadly speaking, the mobile device market can be split into three main sectors: data-centric hand-helds that might have some internet/email access (palmOne Tungsten T5, older iPaqs); wireless hand-helds that are data-centric devices with email and voice support (Blackberry, O2 XDA II); and smartphones that are voice-centric devices with added data functionality (Orange c500, Nokia Series 60). There are sub-groups, but these represent the vast majority of sales. You can be forgiven for thinking the whole thing starts to smell like ‘convergence’. This is voice and data convergence in the hand-held space, and just like in the communications sector, it is the future.
The IT channel plays a strong role in delivering hand-helds and wireless hand-held solutions, although with the latter the mobile operators are fast becoming key players.
Whereas traditional PDA sales fell below the 10 million mark last year, Q2 sales of mobile devices (hand-helds, wireless hand-helds and smartphones combined) surged past 10 million, up 82 per cent on Q1, according to the latest figures from Canalys. Within that, traditional PDA sales fell by six per cent, but converged
devices such as wireless hand-helds and smartphones were up a staggering 137 per cent.
The majority of that growth is down to one company: Nokia. The mobile phone giant shipped 5.4 million smart phones in the quarter. Canalys noted that shipments were boosted by another wave of new models, in particular the business-oriented Nokia 9300 clamshell keyboard model, which follows on from the Nokia 9500 communicator launched in Q4 last year. Although most sales were accounted for by the company’s Series 60 smartphones for a more general audience, the Nokia 9300 was snapped up by mobile professionals.
Rachel Lashford, analyst at Canalys, explained: “The way we see it, the majority of growth in the mobile-device arena is coming from smartphones and Nokia is driving much of that growth. It is banging out new models every quarter, mainly second- generation (2G) but now also 3G devices. With the Communicator 9500 and 9300 clamshell device, Nokia is trying to push its way into the enterprise space.”
Time to get to grips with hand-helds
New converged hand-held devices and smartphones are becoming big business. But getting your business customers to bite will take decent solutions and new partners. Martin Lynch investigates
Gartner thinks that, outside of smartphones, the future for many PDA makers and their channel partners lies in wireless hand-held devices. Worldwide PDA sales for Q1 this year hit 3.4 million units, up 25 per cent on the same period in 2004, and the strongest Q1 the industry has ever experienced. Gartner put the growth down to the popularity of high-end wireless models.
“PDAs with integrated wireless LAN or cellular capabilities accounted for approximately 55 per cent of
all PDAs shipped in the first quarter of 2005,” said Todd Kort, principal analyst in Gartner’s computing platforms worldwide group. “This increase is primarily the result of the growing popularity of wireless email, with users favouring larger displays and qwerty keyboards that are operated with both hands.”
So, while there is a market for these converged devices, where can resellers expect to make their money? Well, it is certainly not in the hardware.
“If we just sold iPaqs we would be out of business, since there is no real money in this kind of hardware,” explained Gary Duke, director at Lan2Lan. “As a reseller, the money is in the application design, ensuring end-to-end connectivity and support. For instance, if the customer has a fleet of 2,000 devices, they want a fast turnaround of problems. We make our money from the design and deployment of the service, and then the upgrading and support of it. There is also no money in PDA accessories, you can get them cheaper on the web. It is very hard to beat the retailers on price as they can buy these add-ons much cheaper.”
Sam Sandercock, head of channel sales at Orange, agreed that it is the applications that count.
“It’s all about business benefit and applications that will drive the business take up. Obviously there are always some sold as corporate jewellery, but for Orange that’s a very small number of devices. Also, when trying to replace the two or three devices people already have, size is important: it’s harder to get business users to carry devices that are bigger than those they already use,” he said.
Like everything else in the channel, the only money worth talking about in the PDA sector comes from the solution. However, the addition of voice functionality has added a new layer of complexity to the sell.
In order to make the most out of each sale, resellers will need to deal with a mobile phone operator. While the data reseller can no doubt handle the creation and roll-out of the data applications and connectivity, the voice side is out of their hands unless they team up with a Vodafone or O2. The only other option is buy and sell their own minutes, which is difficult to do when the big mobile players are now heavily exploiting the hand-held sector. For instance, O2’s XDA II hand-held is a popular seller, while Orange, in addition to its own smartphones, also sells hand-held devices from palmOne and Nokia. If the features on these devices are converging rapidly, then so are the channels that provide them. Mobile phone operators and IT distributors are already courting each other.
Ingram Micro recently announced that it will be pushing a wide range of Vodafone’s mobile solutions and hardware, such as the Blackberry. (CRN 13 June) Orange also took on Ingram in February to sell its range of mobile data products across the UK, France and Belgium. (CRN 14 Feb) The deal covers mobile voice and data products and services, and will be expanded to include hardware, such as PDAs. Last August, Hewlett-Packard (HP), which dominates the struggling hand-held market, launched the iPaq h6340, its first converged PDA device with voice capabilities.
Two months later, it was looking for help from the voice market, signing up with T-Mobile to help boost iPaq sales through the use of a special connectivity pack that offered users Wi-Fi, and unlimited GPRS access for a small monthly fee. The converged iPaq 6500 is now available with other products coming later this summer. This year HP will also launch its first smartphone, and those HP resellers looking to add to their ‘mobility’ portfolio would be wise to start preparing some solutions now.
There is already plenty out there and the opportunity is there for resellers as long as they are willing to be flexible.
Lashford explained: “There’s a good opportunity for the IT channel if resellers can put together a good package. Security is an obvious area. The push-email topic is very hot now too and being able to show how this works in a secure fashion is a good solution. Resellers will have to learn to work with new partners. HP is getting into the smartphone market but it will have to consider approaching the mobile phone channel. After all, it will be going up against the likes of Nokia, Sony-Ericcson and Motorola.”
Sandercock added: “Our Orange Channel Partner Programme targets the channel. We have around 120 resellers and service partners, such as Computacenter and Eurodata and we are also working with Ingram and Hugh Symons. We are after partners that can roll out applications securely. It’s vital we work with VARs that understand that kind of thing. A lot of these resellers would already be managing firewalls and security for many of their customers.”
Duke said: “There are certainly opportunities in providing some form of infrastructure and security for these devices. We are dealing with one company at the minute that has 16,000 unregulated devices owned by the employees. It is afraid of losing its Intellectual Property rights. It now has to work out whether to support them formally or ban them from the network. It’s a massive challenge.”