HP creates separate PDA business unit

Restructuring expected to deliver better focus on developing BlackBerry killers

Tom Sanders in California, vnunet.com 14 Feb 2006

HP has created a separate business unit centring on its iPaq handheld computers.

The firm expects that turning the venture into an independent business unit will improve its market focus and allow it to better target the market for converged PDA/mobile phone devices.

HP's handheld business was previously combined with notebook systems in the Mobility Business Unit. But while laptops are considered a mature market, the converged handheld space is witnessing rapid change.

The vendor's iPaq line of PDAs is currently trailing behind market leader Palm in the handheld segment. Overall sales of handhelds that lack integrated mobile phones are on a steady decline.

Smartphones and converged devices such as the Palm Treo, BlackBerry, Motorola Q and Nokia E series are witnessing strong growth. HP is addressing this market with several models including the new HW6900 launched on Monday.

Brad Akyuz, a senior analyst with Current Analysis, expects the HP restructuring to result in the accelerated launch of new iPaq models geared toward the enterprise.

"HP is now in a better position to target the enterprise space with more compelling devices," he told vnunet.com.

"HP is in a good spot because it can easily leverage synergies between [its PC and PDA] units while selling to big corporate clients."

Akyuz expects that HP will stay clear of the consumer segment, in which Nokia, Motorola and Samsung are battling for market share. HP would have a hard time competing against these entrenched providers, according to the analyst.

HP's new unit will be headed up by David Rothschild, a former Netscape executive who sold his Pixo Java company to Sun Microsystems in 2003.

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