A Bear's Face on Mars Blake Lively's New Role Recognizing a Stroke Data Privacy Day Easy Chocolate Cake Recipe Peacock Discount Dead Space Remake Mental Health Exercises
Want CNET to notify you of price drops and the latest stories?
No, thank you

Handhelds gaining the upper hand

A new study suggests that the supremacy of the venerable notebook computer is threatened by more nimble handhelds, such as the BlackBerry e-mail pager.

It's not yet a case of evolve or die, but a new study suggests that the supremacy of the venerable notebook computer is threatened by more nimble handhelds, such as the BlackBerry e-mail pager.

A survey by brokerage firm Goldman Sachs found that when corporate workers are given the handheld devices from Canada's Research In Motion, their use of laptops declines markedly.

Time spent on a notebook dropped by an average of 45 percent after workers were given BlackBerry pagers, according to the survey. In addition, 19 percent stopped using their laptops.

"BlackBerry usage is different than that of other devices--be it cell phones, (handhelds) or laptops," Goldman Sachs handheld analyst Vik Mehta said.

Mehta added that the BlackBerry earns its keep, calling it a "a high-utility, low-cost item whose time has really come."

Although the survey of 175 BlackBerry customers doesn't set a definitive pattern for the future, the findings provide food for thought.

For one, the results indicate that the notebooks are not nearly as attractive as they were before there were other ways to check e-mail, and they suggest that laptop makers will need to beef up their products.

The findings also show that workers adopt quickly to new technology, with many changing their usage dramatically after only a couple of months with the new devices. This bodes well for the efforts by Palm and Microsoft to convince companies to move some of their key business software over to handheld operating systems.

Berry busy
According to the Goldman Sachs study, turning to BlackBerry pagers decreases notebook use.

• Laptop use went down 45 percent on average when workers were given BlackBerry pagers.

• Nineteen percent of workers stopped using their laptops entirely when given a BlackBerry.

• Logins from notebooks to corporate networks decreased 25 percent after workers received BlackBerry pagers.

• Goldman Sachs upped its 2005 forecast for how much corporations will spend to connect workers to the mobile Internet from $13 billion to $20 billion.
RIM first released its pagers in January 1999. It makes two models, each with a tiny keyboard. The smallest model is the size of a traditional pager, and the slightly larger one looks more like other handheld computers. The company boosted its subscriber base to 164,000 among 7,800 companies by the end of its fiscal fourth quarter Feb. 28. That compares with about 120,000 at the end of its third quarter.

Shifting from laptops to handhelds can save companies money, the Goldman Sachs study found. The brokerage noted that the total yearly cost of buying and supporting a laptop can reach $9,700, assuming a two-year life for a notebook. That compares with the yearly cost of $2,100 for a BlackBerry, which is assumed to have a one-year lifespan before an upgrade.

RIM Marketing Director Mark Guibert said the cost benefit of decreased laptop use is something RIM uses as part of its sales pitch.

"It's a strong argument during any economic climate, but it becomes even more compelling when companies are actively searching for cost efficiency and productivity boosts," Guibert wrote in an e-mail Monday.

"Power" users
"Power" laptop workers--showing the biggest dip--saw the amount of time spent each month on their laptops drop nearly 70 percent, from 23.9 hours to 7.3 hours. This suggests that accessing corporate e-mail is one of the main reasons that many people use their company-issued laptops--and what keeps them logged in the longest.

In some ways, it's a story notebook manufacturers have already begun to listen to. The rise of the BlackBerry has hardly gone unnoticed. Many computer companies have started reselling the pagers and are also looking to include pager-like functions in their laptops. Likewise, Palm promised to deliver by year's end a device that offers the same always-on access to corporate e-mail that RIM devices provide.

Goldman Sachs said that while the magnitude of its findings might be changed by a larger survey, the results were convincing enough to boost its estimate of the overall market served by devices such as the BlackBerry. The firm now estimates that by 2005, corporations will be spending $20 billion a year to give their workers mobile access to the Internet, up from a previous forecast of $13 billion. Today, the firm said, such spending stands around $383 million.

At first blush, such findings might suggest reasons to fret for the top PC makers, which have counted on reasonably strong laptop sales to help offset the rather dismal market for desktops.

However, such a shift could help the laptop makers that also sell BlackBerry pagers, such as Dell Computer and Compaq Computer, to gain market share on some of their competitors.

"What customers are looking for is somebody that's accountable for the whole solution," said Tony Bonadero, director of marketing for Dell's corporate laptop product line.

Click here to Play

RIM: BlackBerry is no fad
Dennis Kavelman, CFO, Research In Motion
RIM's challenges
As for the cost difference, Bonadero said, many of the costs attributed to the laptop stem from the already present stable of tech workers at corporations. And although there is minimal expense in supporting e-mail and calendar information on handhelds, he said, it is actually quite costly for big companies to move their main applications over to devices such as a Palm, those based on Microsoft's Pocket PC or BlackBerry.

RIM also faces challenges.

"One of the key risks for RIM is the lack of network capacity," Mehta noted in his report. In the United States, RIM operates on two paging networks, both of which are often congested in major cities. In many cases, RIM has enough of its devices to fill additional orders but is unable to do so because of network limitations, according to the report.

Overseas networks are even further behind.

"North America is ahead of most other places in terms of paging protocols," Envisioneering Group analyst Richard Doherty said.

For that reason, as well as the inherent limitations of a handheld's small screen, the laptop is not likely to see its role in the corporate world diminish too much in the near future.

"You still don't want to edit your documents" on a BlackBerry, Doherty said.

Bonadero, an avid BlackBerry user himself, concurred. Bonadero said he uses his Blackberry while traveling during the day. But once at a hotel, he plugs in his laptop to read e-mail attachments, check his presentations and do other work that requires more data entry than is practical on a pager-size device.

In all, Bonadero figures his laptop usage has declined only to the extent that he has responded to a few e-mails by the time he logs on via his notebook.

"I still use my laptop about the same amount, to the dismay of my wife and children," Bonadero said.