China handheld sales give hope to Palm

With worldwide sales in handheld devices in their third consecutive year of decline, Palm is turning its eye to China which has become the largest market in the Asia-Pacific, outside Japan.

Despite its late entry in April, the California-based company is the leading multinational handheld supplier in the mainland, according to International Data Corp (IDC).

'Palm has shown impressive growth, garnering a 5 per cent share of handheld shipments in China in just three months,' said Bryan Ma, senior manager of personal systems research at IDC.

Hewlett-Packard and Taiwanese original equipment manufacturer Mitac each captured a 1 per cent share of China's handheld market in the second quarter of this year.

Although low-priced domestic brands such as HiTech and Min Ren that run on proprietary operating systems still dominate the sector, mainland buyers were disappointed by the lack of innovation, Mr Ma said.

This disappointment contributed to a 50 per cent contraction in handheld shipments in the second quarter of this year from the same period a year earlier.

Palm has recognised the importance of China, which had a 12.5 per cent share, or 1.55 million units, of global handheld shipments last year.

'We will aggressively develop the market in China, which presents significant growth opportunities for Palm in Asia,' said Todd Bradley, president and chief executive of Palm Solutions Group. In a move signalling its commitment to Chinese buyers, Mr Bradley visited government bodies and distributors in Beijing and Shanghai before arriving in Singapore last Wednesday to launch a trio of handheld devices.

'We are trying to build local relationships in China to better understand customer needs. We are also looking at how to grow our market share,' Mr Bradley said.

Dismissing suggestions that the pure personal digital assistant (PDA) market is dying despite a global slump in shipments, he said: 'I am confident Palm will produce innovation that will bring the market back.'

The company last Wednesday introduced the Tungsten T3 and Tungsten E, aimed at business buyers, and the Zire21, a replacement for its consumer hit from last year, the Zire.

According to Palm officials, Chinese text input capabilities will be incorporated into the new models for markets in the mainland and Hong Kong 'in the next couple of months'.

With localisation of products, the firm would also expand its list of distributors to target enterprises in key cities such as Beijing, Shanghai and Guangzhou, said Mr Bradley.

At present, Palm has three distributors, Digital China, Max Power and ECS Computers (Asia) in China. Mr Bradley also said Palm planned to increase its retail presence in the mainland, but declined to elaborate. It has one retail store in Shanghai.