Hewlett-Packard's plan to release several smartphones this year is yet another sign that the standard PDA marketplace is quickly morphing into a wireless market that emphasizes advanced mobile handsets. HP, a little late to integrating cellular technology into its handhelds, unveiled its first handset, the iPAQ h6315, only last summer.

The company—which usually keeps upcoming mobile product plans close to the vest—joins manufacturers like palmOne and platform providers like Microsoft with Windows Mobile and PalmSource with the Palm OS in altering its predominant focus on PDAs to make smartphones more of a priority.

The Changing Landscape
Successive reports and studies from the last couple of years demonstrate a steady decrease in shipments and sales of unwired PDAs and a corresponding increase towards the purchase and deployment of smartphones and cellular-wireless handhelds——some pundits refer to certain devices, Pocket PC Phones and RIM BlackBerries in particular, by that designation..

Today, for example, IDC announced the worldwide market for handhelds experienced its fourth successive quarter of year-over-year decline during the fourth quarter of 2004. In spite of shipments growing 37.4 percent from the third quarter (due to the holiday season), they fell 18.7 percent (to 2.8 million units) compared to the fourth quarter of 2003.

For all of last year, worldwide shipments reached 9.2 million units, a decrease of 13 percent over 2003's figures. 2004 also marked the first time since 1999 that worldwide handheld device shipments slipped to under 10 million and the third straight year of decline since the market peaked in 2001.

IDC analyst David Linsalata commented, "Despite a rise in quarterly shipments due to holiday seasonality and consumer uptake of bundled and integrated GPS receivers, increasingly saturated markets and stiff competition from converged mobile devices drove the handheld device market to its third straight year of decline."

By contrast, research firm Canalys reports that global shipments of mobile devices as a whole (wireless and non-wireless) grew by 51 percent last quarter. Nearly all of that increase is attributable to growth in the wireless device segment.

Revolution or Evolution
Even though many industry experts blame the smartphone for the PDA's dimming fortunes, there is another way to look at the current state of affairs.

Smartphones, which come in all shapes and sizes, are simply the merger of a PDA with the wireless voice and data capabilities of a mobile phone, or, as is the case with most Symbian-based handsets, the other way around—not to mention everything in between. So smartphones are really the next logical or evolutionary step in handheld and cell phone development.

These devices aren't revolutionary in themselves, per say. Rather, the revolution lays in the applications and services that smartphones, in conjunction with faster and more capable wireless networks, set in motion.