The PDA Trilogy: A Story of Evolution
"Business notepad", "multimedia recorder", and then "multimedia player"
Palm used to dominate the PDA market for quite a while until the arrival of Microsoft Pocket PC. SONY, a consumer electronic manufacturer, joined Palm, and a flock of Taiwan brands moved toward Microsoft to market their own PDA products. Although it has been only a few years, the market has been changing so fast that the consumers are often at a loss about what to choose.
It seems that both the global PDA market and the sales of the manufacturer have been on the rise, as well as more and more players are flooding into this market. What’s surprising is, however, no substantial change, at least no explosive growth for the user population has taken place, like what occurred in the global mobile phone market before,.
As of the end of September 2003, about 2% of people of the age group between 20 and 60 in Taiwan owned PDAs. Specifically, that’s about 260,000 people, 70% up from that of December 2002 (about 1%, or 150,000 people owned PDAs at that time). Anyway, the growth was admirable.
150,000 or 260,000, however, is just a tiny fraction, when compared with the mobile phone population of Taiwan (it is estimated that about 81% of the entire Taiwan population have mobile phones).
The 2% ownership rate is even much lower than that of the digital camera (6%). In terms of the target group categorization in high-tech marketing, the PDA market is still at the Innovator stage, with only one foot into the Early Adopter stage.
While most high-tech marketing textbooks are interested in how to bridge the gap between "Early Adopters" and "Early Majority", few mention the fact that there’s also a gap between "Innovators" and "Early Adopters".
One reason, perhaps, is that it is not a wide gap, or much easier to be stepped over than the one between "Early Adopters" and "Early Majority". Neglected as in many cases, it has actually been observed in the PDA market.
Usually, for innovative users, there are always reasons that make a product absolutely necessary. For example, the ever first group of mobile phone users (businessmen, or senior executives) did not hesitate to pay for the ability of picking up the phone wherever they were - however expensive, ugly and hard-to-use the handsets were. What they most cared about was the utility and efficiency that the product could bring them.
Also, there is a group of maniac for technologies, who will buy a product for just one reason: they love it. Such people often exchange their experiences and opinions online within their own circles. Once a new product is introduced, they will rush to tell everybody else. What’s more, they are highly loyal to and often defend their favorite brands.
Early adopters are the first ones affected by innovators. If a family member or a colleague has a PDA and that seems good to them, they will buy one pretty soon. Before they buy, they usually ask the opinions from that family member or colleague.
Obviously, the relationship network usually functions as a channel for innovators to arouse interests in early adopters. And innovators often play an important role of advisor. This usually happens when the penetration rate of the product is extremely low. (Have you ever consulted an expert before you buy a handset?)
For the past few years, the PDA has maintained a fast growth in sales, mostly with the contribution of innovators (the author, for example, has had three PDAs). This explains why the infiltration rate is so low despite the continued growth in sales.
So far, manufacturers have been trying to cater for innovators, in a hope to persuade existing users to switch to new models (with high data rates or color displays), following the well-known dogma of the IT industry: "stimulate higher demands with more powerful functions". To cater for the early adopters, however, they will have to offer something new:
1) Innovative interfaces: early adopters tend to be more carping at the interface than innovators, or, in other words, less tolerating about complicated interfaces. This is a fact that has been proven by many PDA models of SONY, which eventually gives up the appearances and operating experience of traditional PDA products. (It’s surprising that PDA can be used in this way.)
2) Diversified prices: the prices of today’s PDAs range from USD100 to USD800. For every additional NTD50 price band, there are a number of models in the market. Four years ago, there were only two options: above USD300 and below that price. Surely, such a diversified range of prices is able to satisfy the more demands.
3) Extension in application: all PDAs have two major functions: recording things (take notes and arrange schedule), and data retrieving and playing, for example, accessing the Internet, receiving and sending emails, playing MP3 or even making phone calls.
In addition, PDAs also enable gaming, movie playing, and photo taking with its built-in camera, in an effort to transform from a "business notepad" into a "multimedia player".
In general, however, most of the consumers with requirements for large-volume data are business people, while those with demands for entertainment files (music, movies, etc) would consider buying other products (for example, MP3 player). Therefore, in the near future, PDA will remain to be a business tool, and its entertainment functions will only be supplemental.
So the original function - recording things - is now even more prominent. In other words, the positioning of PDA at the current stage should be "multimedia recorder", instead of "multimedia player".
Troublesome as it is, recording things by inputting words is acceptable to the innovators. However, to cater for early adopters, new functions are necessary, for example, video and audio recording, and photo taking.
The role of "multimedia player", therefore, should be left to the mass market. In other words, a better way is to highlight the "business notepad" role of the product to innovators, and "multimedia recorder" role to early adopters. When it eventually gets into the mass market, it should focus on the role of "multimedia player" The above is the so-called trilogy of the PDA.
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Predictions on China Internet Market (1) Saturation Stage - 2006/02/26
The PDA Trilogy: A Story of Evolution - 2004/02/22
