After being written off by most of the industry, it appears that the PDA isn’t a dying category after all. Gartner’s most recent market report a month ago, showed that shipments to distributors had increased markedly in the first quarter of 2005, an unexpected fillip for a type of computer most commentators have long since convinced themselves is on its way out.

In fact, the return to form began as long ago as last year, with Gartner’s figures for Q2 of 2004 showing modest growth after 10 quarters of depressing decline. That modest blip hadn’t stopped conjecture that the future of handhelds belonged to just about any device other than the classic PDA. Perhaps smartphones would prosper, or 3G phones, or ultra-light-laptops, or perhaps the whole idea was now obsolete and other types of specialised portable device such as iPods had supplanted PDAs for good.

The problems in the PDA sector arose out of the general difficulties in the IT industry after the stock-market troubles of 2000, and were probably an inevitable part of the maturing process. Go back further into the past and it’s clear that the sector has gone through periodic crises, of which this was only the latest.

Don’t pass go
First came pioneer Go Computing, the startup that in the late 1980s and early 1990s infamously burned through tens of millions of dollars in a failed attempt to shift pen-based handhelds nobody was quite ready to buy. The mantle was eventually taken up by Apple in the form of the Newton pen computer in 1993, but after five years of modest sales it was canned. Apple complained - without an obvious hint of irony - that the Newton couldn’t be successful because it had become too much of a cult. Like its namesake, Isaac Newton’s famous fruit, this was a product that had fallen out of its tree with an unpleasant thud.

The Newton was in fact a huge success for one company, Palm Computing, which wrote the Graffiti handwriting recognition software for it. These sales helped fund the development of its own handheld, the PalmPilot, which eventually reinvented the whole category. Palm’s problem was that it was sold not once, but twice. First U.S Robotics bought it from its founders before itself being bought by 3Com. Somewhere along the way - even after Palm was eventually spun out of 3Com - the momentum of the PalmPilot PDA slowed and innovation became incremental improvement.

The Gartner figures show that not everyone is benefiting from the unexpected upturn of interest in PDAs. PalmOne (as it is currently known - but not for long), for instance, has been overtaken by Windows CE as the dominant platform, with its market share having fallen to its lowest point for a decade. Gartner also places RIM’s Blackberry as another big winner, showing growth of almost 76 percent in the first quarter. Equally, the inclusion of the Blackberry as a PDA is contentious; PalmOne claims the company’s products are really smartphones and not in direct competition with its handheld computers, an objection that looks reasonable.

It’s also worth pointing out that the Gartner figures measure shipments – units sent to distributors and retailers rather than units being bought by customers for cash. This doesn’t make them innacurate, but it does make it harder to judge the relative performance of individual companies and PDA models within the figures. Coming quarters will reveal whether anyone actually bought these computers or not.

In any case, it is too early to write off PalmOne, which cleverly timed the announcement of its new and impressive LifeDrive Mobile Manager to coincide with the difficult market news. After years of making small improvements to the same basic formula, the new PDA marks a step up in capability, and should give it a chance of once again competing with the army of Windows devices.

LifeDrive - a new direction?
Anyone who has struggled with the compromises of PDA design will appreciate the dramatically increased storage capacity of 4GB, with a SD-based flash memory slot for adding further storage over the PDA’s lifetime. Similarly, the persistent memory store is overdue (no more losing files because the battery has been left to run down), as is the built-in Wi-Fi and ability to replicate the directory structure of an owner’s desktop Windows PC. Files can be left in their native format and carried or, if they are MS Office files, converted into viewable documents simply by dragging and dropping them on the LifeDrive icon on the PC’s desktop.

PalmOne hopes the new machine will function better as a lightweight laptop rival and all-round portable image, music and video player. It will still have to work hard to explain the platform’s advantages over rivals, admits the company’s marketing director for Norther Europe, Colin Holloway.

“One of the issues we face is that the unique selling points are quite subtle. Our file sizes are much smaller and power consumption is also a plus,” he says. According to Holloway, PalmOne’s core market share is more stable than it appears and much of the apparent loss of share is down to vertical markets. “The place where we are losing is to the GPS people. GPS has taken about 15 percent of the UK market.”

Devices such as the Treo – a smartphone – will continue to take the lion’s share of the company’s investment money, but he predicts that the future LifeDrive-type products will mostly expand the new concept with more storage and processor power. It now looks as if PDAs will continue to grow, albeit in new forms. What is clear is that the industry needs Palm to remain competitive, because without innovation will inevitably drop off in the Windows-based devices that have taken centre-stage.

More trouble ahead?
The problem with the rising feature set of PDAs such as the LifeDrive is that the increasing power also creates extra problems in terms of the one issue that isn’t mentioned when companies pore over the meaning of market share figures – security. It is an issue faced by everyone involved in mobile computing in businesses. Mobile computers can go where the business problem is but that also means they can take problems with them where they go.

Read part II on PDA security -PDA security starts to improve.