HP Trumps Dell's PDA Entry

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Dell officially announced its entry into the handheld
PDA market, lifting the wraps off a pair of Axim X5
devices running on Microsoft’s Pocket PC 2002 software.

Dell’s PDA plans, leaked in the
press in recent weeks, puts the PC maker right in the Pocket PC thick of
things, forcing market leader Hewlett Packard to release two new iPAQ models — one matching Dell’s $299 price point.

Even as the two powerhouse PC makers get set to duke it out in the PDA
space, analysts aren’t expecting a price war between Dell and HP. “Dell’s
pricing is very aggressive. They will definitely take away some business
from HP. By the end of next year, Dell will be selling about 600,000 units
and the chunk of that will come from HP’s market share,” said Aberdeen Group
analyst Peter Kaftner.

“I don’t expect HP to match Dell’s aggressive pricing. People looking for a
bargain will turn to Dell. But, that doesn’t mean HP is giving up. With
today’s announcement of a high-end device for enterprise clients, it’s clear
HP will be a big part of this race,” Kaftner told internetnews.com.

The Palo Alto, Calif.-based HP on Monday released two new Pocket PC
devices – the low end ($299) IPAQ h1910 and the iPAQ h5450, a high-end
device that integrates biometrics security, WLAN network access (802.11b)
and Bluetooth wireless capabilities.

Kaftner said the HP devices add features that Dell doesn’t have and creates
new market segments in the space.

Jupiter Research analyst Michael Gartenberg agreed. “HP still differentiates
at the high end with devices that add 802.11b, Bluetooth, a universal remote
and Biometric security but all that comes at a price,” he said, adding that
the real head-to-head competition will be in the low-end (consumer) market.

“HP has no intention of giving up any ground to Dell but in the early 90s,
people also claimed that no one bought PCs through the mail and only bought
at retail. Underestimating Dell’s ability to execute would be a mistake for
HP,” Gartenberg warned.

Still, Dell’s aggressive pricing ($50 rebates through the Christmas shopping
season) sets pricing high-end Axim X5 at radical levels, much lower than
comparable devices from competitors like Toshiba, Casio and newcomer
Viewsonic.

In an industry where the same components and manufacturers are used to
produce comparable PDAs, pricing usually sets apart the players and analysts
expect Dell to make quick headway

“Dell’s entry reflects the maturity of the PDA space. With the price point
Dell is targeting, they are quickly shifting the battle for the hearts and
minds of consumers to prices previously unheard for Pocket PC devices,”
Gartenberg noted.

While Dell’s move certainly boosts the Pocket PC market, Gartenberg believes
the rapid commoditization of the Pocket PC platform will make it difficult
for vendors to differentiate their products” and still keep price points
low.

HP’s low-end iPAQ h1910 touts 64 MB RAM, a secure digital (SD) expansion
slot for additional storage, a removable slim battery and a synchronization
cable.

HP said the high-end iPAQ h5450 handheld, targeting enterprise customers, it
the first PDA to integrate biometrics security, wireless LAN and Bluetooth.

“A thermal biometric fingerprint reader helps to ensure that critical data
is protected from unauthorized access. The fingerprint registration process
authenticates the owner’s unique fingerprint, allowing access with a simple
fingerprint swipe. Users also are given the option to combine this with a
PIN and/or password,” the company said.

The iPAQ h5450 also offers VoIP software, wireless email and calendar access
software, ad-hoc wireless file sharing and messaging and real-time setup and
management of conference calls.