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Coming to grips with handheld costs

Handhelds and PDAs may simplify day-to-day business tasks, but they can cost companies up to $3,000 per user to operate each year, says a new report.

Handhelds and PDAs cost much less than PCs and can simplify day-to-day business tasks, but that doesn't mean the tiny machines are cheap to own, according to a new study.

Devices such as a Palm, Pocket PC or Handspring Treo sell anywhere from $99 to $499, but they cost companies as much as $3,000 per user to operate each year, researcher Gartner said in the study, released Monday.

Add a wireless connection with monthly service fees, and the yearly cost rises to nearly $4,400.

While that figure doesn't approach the cost of owning a PC, which is roughly two to three times higher per year, it may be more than some companies expect, Gartner found.

In many cases, increases in productivity or revenue can offset the yearly cost of a handheld, Gartner said. But the researcher added that companies should carefully consider total costs--including hardware and services--against potential savings before rolling out a fleet of handhelds to their workers.

"When assessing the total costs of wireless mobile products, we found that the more capable the device, the higher the cost," Phil Redman, a Gartner research director, said in a statement. "The more processing power it has, the more applications it can store (which leads) to higher support and operational costs."

Gartner found that about 60 percent of the yearly cost for wireless-enabled handhelds goes to paying for hardware, software and network services, with 30 percent going to technical support and similar services, and about 10 percent to training and related activities.

Savings can come in many forms, from increased productivity to lower cost of materials by switching from paper to using electronic readouts on the handhelds.

As long as companies link their handhelds to specific job functions and measure them with indicators such as sales revenue, a return on investment is possible for many mobile applications, Gartner said.

Because service costs play the largest part in driving up the cost of wireless devices, Gartner recommends companies consolidate their network service providers and aggressively negotiate contract prices.