PDAs

PDAs go corporate

The Indian PDA market is growing at a rapid clip. PDA sales are being driven by enterprises and government agencies with the consumer market going for phones with PDA features, says Akhtar Pasha

PDA sales to enterprise and corporate customers are as high as 90 to 95 percent, but low where the individual user is concerned, says Daniel Ingitaraj

Last year saw a complete turnaround in the PDA sales pattern. In 2001, the the consumer segment accounted for a majority of sales. In 2002, enterprises and government agencies drove the market. Powering this trend were a bunch of third-party software development companies offering customised, task-based software applications that turn the PDA into a useful enterprise tool. PDAs are carving out a niche for themselves in corporate and government circles where pilot projects are underway.

IDC India data shows that 22,622 units of smart handheld devices (SHD) were shipped in 2002, while revenues stood at Rs 25.4 crore. IDC clubs standard PDAs, keypad-based models and PDA phones under the SHD banner. The Indian SHD market grew 25 percent Q-o-Q (Quarter-on-Quarter) in Q3 (JAS) 2002. Q4 (OND) 2002 was even better; sales grew by 73 percent Q-o-Q. Gaurav Misra, analyst for IDC’s Computing Products Research Group says, "Given the nature of this volatile market a single deal may sway the whole scenario. This is the reason why vendors have done well in some quarters and not in others."

In unit terms, consumer electronics major Casio dominated the 20,500 units strong PDA market. Next came Palm, followed by HP and Encore. Of course, the PV-S600—Casio’s biggest seller—was priced at Rs 6,500 as against Rs 33,500 for the HP iPAQ HD3950. The revenue figures would still show Casio leading but by a slimmer margin than it did in unit shipments where it had a 74 percent market share. Palm has upgraded its support services in India and this could see it narrowing the gap in 2003. Encore’s Simputer finally made its debut in OND 2002 managing to get a respectable 5 percent of annual unit shipments in those three months.

PDAs cater to almost every price point from Rs 6,500 to Rs 33,500. Among these, low-end, inexpensive models like the Palm Zire and Casio PV-S600 have been the best sellers. Sales departments of FMCG and insurance companies are heavy users of these products. In the government, these SHDs play the role of low-cost computing devices that can communicate with back-end IT infrastructure.

India sees reverse trends

India has been witness to some reverse trends. According to Gartner Dataquest, globally 70 percent of all PDAs are purchased by consumers and just 30 percent by businesses. In India, analysts and industry pundits claim that sales to enterprises like HLL account for as much as 90 percent of all PDA sales with only one in ten PDAs making its way to a consumer. Microsoft India’s senior marketing manager, Daniel Ingitaraj says, "As per our experience, PDA sales to enterprise and corporate customers are as high as 90 to 95 percent. The products these enterprise customers prefer are priced between Rs 10,000 to Rs 25,000." Of course, the fact remains that most consumers prefer buying from the grey market, where smuggled PDAs are available at prices that are significantly lower than that in authorised stores.

CRM and SFA lead the way

Enterprises are buying PDAs for CRM and sales force automation (SFA) applications. TechPac channel executive Ashish Sahay says, "We are working with software companies like Readi-Minds and ITTI, which add value by loading customised software applications such as sales force automation or financial management tools."

As with notebooks, PDAs are still something of a luxury. "Individual users do not feel the need for a PDA," says Ingitaraj. If Indian companies start investing in application software like CRM, sales personnel can use PDAs to collect data from customers and then directly synchronise it to the CRM application on their desktop PCs when they get back from their sales calls.

Says Misra: "There is a plethora of independent software vendors in India who are producing customised, task-centric application software that runs on an SHD. The availability of such applications could increase the value-proposition of SHDs for commercial deployment and is seen by many analysts to be among the primary drivers for the commercial market." For example, Tech Pacific has business alliances with 12 independent software vendors, including ReadiMinds and ITTI. Casio too works with several third-party developers.

Sanjeev Patil, ReadiMinds’ business development manager says, "We do customised application development to include sales force automation, financial tools like report generation and analysis, stock inventory for manufacturers and applications that let them track product movement. These are a few simple but significant value propositions for enterprises whom we work with."

E-governance projects like e-Bhoomi and rural educational programmes, use of PDAs by police departments and smartcard-based applications such as citizen IDs and driving licences would be future drivers for PDA sales in India.

Who’s buying?

Misra says, "PDAs are mostly used to run management tools for sales force automation. Insurance agents use these as do corporates, FMCG and financial companies. PDAs are used to track order details, stock options and data collection. E-governance projects for state and central governments will drive PDA adoption in the future." The government of Andhra Pradesh is using the Casio Pocket Viewer in government schools for recording attendance. The data from the PDA is later used to update the database at the main data centre. The AP government’s requirement is for 10,000 units. In addition to this, AP has big plans for its projects, including e-Bhoomi, issue of challans for transportation and eSeva. Tyco, HLL, Proctor & Gamble, 3M and GE Medical Systems are using products for sales force automation and other applications. Kulbhusan Seth, chief manager for Market Planning at Casio India adds that the bulk of their sales are to enterprises. Buyers for products like Pocket Viewer include ICICI Bank and TV channel Aaj Tak. Seth says, "Many corporate entities like HP and HCL buy Casio Pocket Viewers to gift their retailers under channel programmes or their end-customers."

Consumers prefer converged devices

Converged devices from Nokia included the 7250/7650 priced at Rs 26,300 and Rs 27,500 respectively and the Nokia 9810 Communicator at Rs 37,500. The Sony-Ericsson P800 is priced at Rs 40,000. These devices offer a convenient blend of phone and PDA functionality at prices matching or lower than those of high-end PDAs. Mobile phones are coming out with basic PIM (Personal Information Management) functions and applications such as calendars, e-mail and Internet access. These features are available on entry-level models like Sony-Ericsson’s T-65, T-200 and T100 with prices from Rs 6,300 going up to Rs 8,500. In comparison, prices of entry-level PDAs range from Rs 6,600 to Rs 12,000. You can’t use an entry-level PDA to make a phone call, but you can use a phone with PIM capabilities to manage your schedule.

The players

Encore Simputer
Encore started manufacturing its Encore Simputer product in October 2002 and it shipped 2000 units in Q4 CY2002. Encore has manufacturing plants in Singapore and India. To augment its production capabilities it has appointed TVS Electronics to manufacture the Simputer; TVSE can manufacture 300-400 units per month.

Encore has positioned its products to target various state level e-governance projects like land records, data collection and police departments. Mark Mathias, Encore Software’s vice president for Hardware Development says, "Besides, e-governance, larger enterprises are showing interest in buying our products for sales force automation. The Simputer is also being used for electric meter reading, issuing bills on the spot and logistics applications."

The company plans to add wireless to its existing offering and offer a Simputer priced below Rs 10,000. These products will be available from Q2 2003-04. A third product integrated with a GPS receiver is in the works. Additionally, Encore plans to bring models supporting WLAN, WWAN, GRPS and CDMA to the market and will use a Lithium Polymer battery to enhance battery life. This product is expected to hit the market in Q4 2003-04.

Mathias says, "We are not into retail sales and our strategy is to make institutional sales to enterprises and various government agencies. The Maharashtra and Karnataka state governments have shown interest in our product for their e-governance projects."

Palm
Tech Pacific’s business strategy hinges upon selling Palm’s entry-level Zire priced at Rs 6,600 to individuals while high-end PDAs like the m130 and m515 priced at Rs 13,500 and Rs 20,500 respectively are being targeted at enterprises. Tech Pacific’s business alliance with ReadiMinds, ITTL and others is helping it market the m130 and m515 to enterprise users such as Birla 3M, GE Medical Systems, Proctor & Gamble and HLL. Till 2001, Palm did not have any service centres in India. In the last one year it has opened 23. The Palm Zire is Palm’s hottest selling product in India. TechPac is expecting a big order worth 5,000 units for Zire from ReadiMinds.

Casio
Casio India stopped shipping its Pocket PC, Cassiopeia Pocket Manager BE300, due to poor sales in 2002. Casio India’s Kulbhusan Seth says, "The Pocket PC has no potential in India. Its cost does not justifies the benefits." The company’s Pocket Viewer PV-S600 and PV-S1600 did roaring business. Last year the company sold 20,000 units of Pocket Viewer mainly to government establishments and enterprises. Seth adds that Casio has sold 4,700 units to Andhra Pradesh government for their rural educational programme. The bulk of enterprise customers are using PDAs for collecting data on the field and sales force automation. To increase its unit saless in India, Casio has increased its service centres from 15 to 23 and plans to ship 50,000 units of Pocket Viewer in 2003-04. The Casio Pocket Viewer PV-S600 and PV-S1600 are priced at 6,500 and 9,000 respectively and are targeted at both individuals and corporate users.

The market view is that there are two clear markets emerging in this niche segment. Of these, the enterprise market will be fulfilled by standard PDAs with tailor-made applications while converged PDA-phones such as the Nokia Communicator, Motorola A388 and the Sony Ericsson P800 will cater to the consumer market.

To increase PDA penetration in India...

• The hardware market has to improve.
• Enterprise applications like CRM, SCM could boost PDA sales—customer data from PDA can be directly synced with a server based CRM application.
• Smartcard-based applications like issue of driving licenses or challans to transporters can be done using PDAs.
• The police can deploy PDAs with GPS capability.
• Government projects like e-Bhoomi, rural education programmes could use PDAs
• Issuing utility bills—power units consumed by a consumer could be directly fed into a PDA to issue electric bills on the spot.