They were dubbed personal digital assistants, and they were supposed to be the ultimate information appliance. Nifty little handheld devices, PDAs would become ubiquitous tools that would hold telephone numbers, keep your calendar, store notes, and send and receive data wirelessly. At least that was what John Sculley, former chairman of Apple Computer Inc., predicted in 1993 when he took the wraps off Newton, the pioneering PDA.

Three years later, the PDA is the poster child for overhyped, underwhelming electronic products. Its troubled history--sales shrank last year to 381,000 units from 389,000 in 1994, according to Dataquest Inc.--may hold important lessons as the world's electronics manufacturers attempt to build other information appliances. Lesson No.1: These hybrid gadgets weren't good in either role they aspired to. They were poor computers and lousy communicators.

PILOT PROGRAM. But hope springs eternal. New PDAs continue to arrive--from Apple, Motorola, Sony, IBM, and modem maker U.S. Robotics Corp., whose six-ounce Pilot, introduced in January, keeps track of appointments and phone numbers. The Pilot can also be linked to a desktop PC, and at the touch of a button, any changes to the calendar, phone numbers, and so on in either device is updated on the other. The device has drawn rave reviews for its proportions--about the same as a pack of cards--and Dataquest analyst Mike McGuire says that it's the first PDA with the right size and shape. But it still has a glaring drawback: no wireless communications.

Manufacturers insist that a consumer market of some sort for PDAs is shaping up, even without communications. The most encouraging sign is Hewlett-Packard Co.'s superscript200LX, an organizer-like product introduced in 1994. It's the most popular PDA on the market, thanks to its software, which includes Pocket Quicken and Lotus 1-2-3.

Even the Newton is shaking its Edsel image. Apple's new MessagePad 130, introduced earlier this year, has an improved operating system and handwriting recognition. In niche markets, such as mobile sales, ``we've been successful even with a flawed product,'' says Steven Andler, senior director of Apple's Mobile Systems Product Marketing. ``Now we'll see what we can do with a product that isn't flawed.''

Still, the PDA isn't going to get far in the info-appliance race until it can communicate, preferably wirelessly. A wireline modem that lets the Newton or the HP superscript200LX retrieve your E-mail is $300 extra. One that can work on cellular networks will set you back $500. Motorola Inc.'s Envoy and Marco PDAs have some of the best built-in communications, but their price--$1,000 to $1,500--kept sales to just 3,000 units last year.

The question is whether the PDA will become a great communicator before wireless smart phones take on all the attributes of a PDA. ``It doesn't make sense to have them as two separate devices,'' argues Joe Carter, managing partner of Andersen Consulting's Center for Strategic Technology. ``If I have something that stores telephone numbers, I want it also to be a telephone.'' Perhaps the ``P'' in PDA should just stand for phone.

By Peter Elstrom in Chicago


Updated June 16, 1997 by bwwebmaster
Copyright 1996, Bloomberg L.P.
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