Handhelds seem to be in the news right now, what with the like of Compaq and Casio deciding to launch their range of mobile computing devices in India. But is this all a hype? Yes, say the channel partners in India. They feel that the handheld craze that has the taken the West by storm, will not take off in India. And the reasons are many. Read on to find out what they are.

At the recently held PC Expo, the product that garnered a lot of attention was the handheld PC (also affectionately called as the palmtop). Casio Inc launched the latest range of the Casio Peia at this event. Other stalls that displayed these products recorded very high number of visitors who were curious to know about the new improvements that are being made to these devices, like the wristwatch PDA.

One thing is certain – there is a great deal of activity taking place to ensure that the reach of the handheld devices is expanded. New features are being added on to them to make them more popular and affordable at the same time.

In fact, hardly a month ago Palm Inc has launched their new $50 PalmMobile Internet Kit that can enable less expensive models of the Palm to connect to the Internet like the more expensive Palm VII. And the company has already sold over a million units of the Kits already.

There are many who feel that the handheld devices are experiencing a boom similar to what PCs had enjoyed in 1982. This was the year when personal computing really took off, with manufacturers coming up with new products and newer offering to the customers. Jeff Hawkins, developer of 3Com’s Palm and today the man behind Handspring, commented at the PC Expo, “The handheld computing space is like the 1982 in the PC space — a robust, emerging market going forward. You have to say what am I going to do next? It’s who can innovate more and who can execute better.”

Today there are numerous players in this market. There are the Compaqs, Palms, HPs, Handsprings, Casios and other leading multinational players. And closer home, in India there are national manufacturers like Network System Technologies (NeST) who have their range of handheld too. And they are all coming up with newer versions of their existing ranges or are devising new ranges altogether. These developments are striking when one considers that the total handheld population measures up to only 5-10 percent of the total PC market.

The channels react

The international community and manufacturers may be waxing eloquent about the handhelds. But the channels in India have a different viewpoint. Most feel that there is not much scope in marketing the handheld in the contemporary market. And Ameet Arurkar, Director, Intellisys and a distributor for the NeST range of products is one of them. He opines,” Unless the handhelds are made available in the sub-Rs 10,000 region, there will not be many takers for it in the market.” He recounts how he has given over 50 demos of the prodcts to various corporates but not a single order has materialized. “As a distributor my priority is to see the numbers grow. And in this case there are no numbers at all,” he adds.

Pradeep Shah, MD, Jay International which will distribute the Casio handheld agrees with him. “Despite what the manufacturers say, the market in India is still not ready to accept this concept. Even laptops are not moving as fast as they were expected to.”

While Ameet has decided to phase the handhelds from his product range, Pradeep says that he will not to the same. He claims that he wants to stock the entire range of Casio products. This is so that when the customers finally warm up to the concept, he will be one of the few who can provide them with the goods. He feels that what is required at this point of time is to educate the users about the benefits of the handheld.

Gaurang Damania of Compunics echoes this view. “I would like to stock the handhelds, but I think before that I would like to see just how well the manufacturers are going to push the idea to the customers.”

The manufacturers on their part are thinking and re-thinking their distribution and brand positioning strategies. Says Ravindranathan, “The PDA is a new concept in the country and we want to market the iPaq as a commodity which will help the corporates and professionals to have an office out of their workplace. Though our immediate competing product in this region is the laptop, we are sure that we can leverage the handheld as it is more convenient and compact.”

Another effective marketing strategy that will be used is to position the handheld in the league of a cell phone. Something which is personal to the user but which is funded by the company he works for. Ravindranath simplifies, “Today most high-level officials in an organization use cell phones that are provided by the company. This is to increase their efficiency and affectivity in their respective job roles. Similarly, if a company provides its top-level management with handheld, the latter will be able to function from may part of the country and even the globe for that matter.”

And users can synchronize the data to and from the handheld and the desktop/laptop with just a click. The bottom line here is that to popularize the handheld, manufacturers will first have to sell the concept and then sell the product.

Battling the gray market

Though many manufacturers are only now circling the Indian market and are getting ready to go for the kill, the gray market has been stocking and selling the products for quite some time. Says a dealer at a customs notified shop in Heera Panna, Mumbai, "We have a lot of youngsters who come in and ask for these handhelds. But the price often deters most if them or they settle for the cheaper digital diaries. But there are others who have no qualms spending Rs 20,000 to buy these."

Incidentally one shop had a plethora of handhelds which were selling at prices that are half the original rates. Even second-hand models were available at throwaway tags.

And this is where the channels are worried. The eternal clash between the gray and the authorized market continues. Says Gaurang Damania, Director, Compunics, which stocks the HP Jornada, "Today the handheld PCs are available openly in the gray market for prices which the authorized channel might never be able to match." For example, the Casio Pocket Viewer 450X, which is a only a digital organizer is available in the gray market at Rs 6,500 while the official price is Rs 8,200.

To counter this price disparity, Compaq has decided to make the iPaq available at Rs 23,000 for the mono-version and Rs 33,000 for the color-version. But even these efforts on part of the manufacturers have not pleased the distributors in the country. Even NeST has competitively priced its handheld at Rs 18,000.

But overall there is a general feeling that eventually the authorized channel will win the battle and the gray market will die out as they will not be able to provide the technical and after sales support. "The handheld is just like the PC. But there are many technicalities that the gray market dealer may not be aware of. So though the handheld is a one-time purchase, it requires repeated servicing, which he cannot provide."

Pradeep too says the same thing. "The Casio Peia sold by my company will support carry-in warranty and I will provide a lot of technical know how to my customers online. But these will be available only to genuine customers." Besides this, the gray market is known for selling dubious products. This is one aspect that manufacturers are going to stress on in all their media propaganda.

OS for the PDA

Though there are many so-called OS that are used in handheld, the three leading ones are Windows CE, EPOC and Palm OS. The later is used in all PalmPilots. When Microsoft launched the Windows CE in 1996, the OS was not very well received and it almost lost out to its competitor Palm OS. However the Microsoft new OS nicknamed Rapier which will be launched soon, might probably alter that. This latest version has a simplified graphical user interface which are user-friendlier than Wyvern the current version of the GUI.

Though the Windows CE release was an anti-climax, it did bolster the performance of handheld market as new competitors rushed to the market with new products to challenge 3Com’s dominance. Companies like Casio, Philips and Sharp made their entry in the market during this time. Frederique Jacquot, Senior Market Analyst at IDC Asia/Pacific had once mentioned, “Windows CE has enabled a variety of vendors to offer products for the Asian marketplace. The result has been greater product awareness, more product availability and extended channels of distribution throughout the region.”

Today most handhelds in India too use Windows CE, like the HP Jornada and the NeST handheld. Could the limitation of the OS be one of the reasons the sales of the handheld has not taken off in India. Not exactly, says Ameet Arurkar. He feels that while a better OS will be helpful, there is no denying that what the user really wants are applications that will fulfill his needs. "Today there are many applications that are standard with handhelds that might be of no use to some users." Unless manufacturers can come up with applications that will cater to the most specific needs of the users, there is no way customers are going to shell out mega-bucks to buy it, he adds.

Despite these feelings, more and more handheld manufacturers are now looking closely at the Indian subcontinent as good business opportunity. According to an IDC report, the Asia/Pacific (excluding Japan) smart handheld device market is forecast to exceed 3 million unit shipments by 2003.

Seeing this development, many manufacturers are now entering India in a big way. And those who are already present in the country will soon have to tighten their belts to prove their superiority over their competitors.

Compaq, for one, is making its foray in the country with respect handhelds. The iPaq range of handheld will soon be available in the Indian market. The company is currently mulling on an effective channel strategy to push the product. Online retailing is one of the many strategies under consideration. Casio to will launch the Peia 150 X soon which will be distributed through Mumbai-based Jay International.

With more and more handheld being able to access the Internet, their usage too has become multi-dimensional. Users can access their email, check on the stock quotes, play games, surf the Net, add, delete or edit documents and folders. And this is prompting manufacturers to tie up with third party developers to provide software that is more user-friendly.

An example of this is Vindigo, makers of New York city-guide software for handheld computers, who will launch a version of the same software in certain cities in the US. Vindigo has partnered with Zagat Survey for restaurant reviews, ClubPlanet.com for nightlife information, and inshop.com for store listings that will be made available to the handheld users to help them make mobile decisions.

And this is not all. The newer genre of handheld now offers much more. You can use it as a personal jukebox. Compaq will have jackets in the iPaq that can be used to add more applications to the handheld. All one has to do is slip a jacket with a particular application onto the slot in the hardware and voila, you have your own personalized PDA. Says P Ravindranath Director, Personal Computing Group, Compaq, "Compaq will work closely with third party software developers who will develop various applications that will be more relevant to the user."

This shows that handheld computers have evolved from digital storage utilities and wireless e-mail devices to an effective driver of e-commerce. AvantGo, for example takes content off the Net and provides personalized information to handheld users. Even when Microsoft introduced its PocketPC handheld platform in April, one of the most touted features was Pocket Streets, a library of full-color maps for dozens of cities.

Even Palm, the leader in handheld devices market, has claimed that it would design and market a handheld early next year equipped with a slot to hold a postage stamp-sized SD card that stores data and that provides electronic books, maps and MP3 files. It has also signed up with 37 content providers to provide web pages designed for small devices.

Sony too has demonstrated its expectant entry into this market with its slim handheld, which will have a thin card for memory and a ‘jog-dial’ which allows users to scroll and open applications without using the stylus. This should be available by the end of the year.

While on one hand, manufacturers are closing in for a kill in the market, dealers, on the other hand, are biding their time to wait for the market to mature as they are unsure just how the Indian populace might react to it. Will the land of the Ganges and IT be able to accept and assimilate the handheld in their everyday life? Or will the product become a luxury for the elite? That is the moot question which only time will answer.

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