Big business in small packages

A little under fifty years ago, Thomas Watson, then chairman of IBM, stated confidently that, in his opinion, "there is a world market for maybe five computers."

Nowadays, you would be hardpressed to find a neighborhood or office uninhabited by hard drives and CD-ROMS. In the 21st century, computers have become as ubiquitous as televisions-and with the advent of personal digital assistants, or PDAs, computer-compatible equipment can be taken quite literally everywhere.

Industry figures indicate that PDAs are steadily growing in popularity. U.S. unit sales totaled 1.3 million in 1999, and in 2000 PDA sales were up 161% in computerrelated categories. For `road warriors', these handheld computers are indispensable and can be used for everything from scheduling and storing addresses to sending and receiving e-mails. And they're not just for business-according to Taylor Nelson Sofres Intersearch, while 49% of wireless Internet device owners use the gadgets for work and another 30% for school; 83% of the owners utilize them for personal use. PDA demographics have broadened from high salaried, mobile executives to anyone who appreciates on-the-go flexibility and easy access to information.

How does growing popularity of PDAs affect the marketplace? Here at Illinois-based Fellowes, one of the industry's only suppliers of a complete line of PDA accessories, our job is to monitor and identify changes in consumer preferences, technologies and the marketplace so we, and other manufacturers, can keep pace with commercial and consumer demand.

CONSUMER PREFERENCES

In the future, the most obvious change will come in the form of a larger "PDA purchase package." As handheld computer prices continue to lower, consumers will find themselves able to spend money on related items. This means increased sales in the PDA accessories category since very few of us can resist buying "gadgets for gadgets." With this broader market, consumers will begin to look for accessories designed to fit their lifestyles as well as their work styles. Items that were once considered "luxury extras" - stylus/pen combinations, cases, bumpers, chargers and screen protectors - will be treated as part of the overall PDA purchase package.

Yet, consumers won't be frivolous when they purchase these accessories. They will search for items that provide the most "bang for the buck" multi-use products that are functional, attractive, and provide all-in-one solutions. And since handheld computers are just one of many on-the-go, techno-items consumers carry with them, accessories must also be smart, easy to carry, and provide quick PDA access.

CHANGES IN TECHNOLOGY

PDAs have been transformed from computerized recorders of names, dates, and times to multi-function, feature-rich devices that can place the information world in the consumer's hand. From constantly improving streamlined designs and expanded memory to Internet-capabilities and compatibilities with a variety of modules, today's PDA is a versatile tool that can function as a MP3 player, camera, or cell phone.

The challenge for PDA accessories manufacturers will be to keep ahead of these changes and provide accessories that complement the advances in technology and still meet consumer needs for form, function, and style.

CHANGE IN THE MARKETPLACE

Since consumer demand frequently drives allocation of marketplace space, retailers have reacted to the PDA surge in popularity and purchasing by expanding and dedicating permanent space to those accessories designed to protect and enhance the PDA investment. Consistent advertising and strong promotions have resulted in a steady increase in sales, and a concomitant higher turnover rate.

Manufacturers need to be aware of consumer trends and changes as PDAs become part of everyday life. Consumers will want PDA accessories to be easily available in the stores they shop most often, instead of confined to computer superstore provinces or ecommerce channels. Not only will mainstream retailers need to rethink planograms to create room for the everexpanding handheld computer accessories category, manufacturers must also redesign their products to provide the ultimate in versatility in a minimum of physical space.

SUMMARY

The PDA and PDA accessories market is far from static. Much like the PC market in the 80s, Fellowes expects the handheld computer market to evolve and define itself based on technological advances and consumer response. With its finger on the pulse of the marketplace, Fellowes will continue to offer innovative solutions that meet the accessories needs of PDA owners.

About Fellowes

Founded in 1917, Fellowes is a family owned and operated company headquartered in Itasca, Illinois. Originally the "Bankers Box Company" Fellowes has developed into a global supplier of consumer electronics accessories and business machines with related businesses in home and office organizational products. With subsidiaries in Australia, Benelux, Canada, France, Germany, Italy, Japan, Poland, and the United Kingdom, Fellowes employs over 1,700 people and expects sales in excess of $600 million this year. For the most recent catalog, please call Fellowes at (800) 955-3344, or for additional information visit the company's website at www.fellowes.com.