In the next five years, the warehousing, manufacturing, logistics, and distribution industries will provide huge business opportunities for VARs offering automatic identification and data collection (AIDC) technology. Handheld computers will play a major role in helping VARs capture their portion of these growing markets.
There are many companies providing special versions of handheld computers. Each version has a different list of product features. The key to making your customers happy is to match the proper feature lists to their needs.
Customize And Standardize In The Same Sentence?
At SCANTECH '99, I spoke with several industry players involved with handheld computing technology. Robert St. Amand, president and co-founder of Global Data Granite Communications (GDGC) (Amherst, NH) and Brian James, director of industrial sales for Psion, Inc. (Concord, MA) both said that standardization is critical for industry growth. However, both men also felt that customization of their products was equally important.
James told me, "A lack of standards has held back industry growth. But, we are making major strides in standards development. We are finally starting to see interoperability among the handheld terminals of multiple vendors. Many connectivity problems have also disappeared."
Although James is all for standards, he said Psion is not rushing to adopt Windows CE technology. Psion has developed its own ROM-based operating system, and according to James, it is becoming quite popular with users. "We have licensed the technology to other companies," said James. "The system's processor requires less power than other systems on the market. The payback is in extended battery life, which is very important to users."
Sales To Smaller Companies Require Some "Hand-holding"
St. Amand said his company is a service provider that offers customization and "embedded enhancements." For example, the company uses embedded computer technology in a device that looks like a potato. Members of the potato industry were concerned about the bruising and mutilation of potatoes by farm equipment. But they had no way of measuring the amount of damage that was occurring. GDGC developed a "smart spud" to give the potato industry the information it needed.
In GDGC's Smart Spud system, a synthetic spud with embedded computer technology is thrown into a potato field. The spud is subjected to the same treatment as regular potatoes. As machines pick up and transport the potatoes, the smart spud sends critical data to a handheld computer. The system's user can watch the screen on the handheld unit to see exactly how the potato is being handled.
"While companies such as Symbol, Telxon, and Intermec target sales to large end users," said St. Amand, "we believe there is still a need for customized solutions such as the Smart Spud. Smaller customers need some hand-holding, but that is exactly what a VAR does best. That's why we partner closely with our VAR network."
If You Build It, They Will Come
If you build the right systems for customers, they will come to you in great numbers. St. Amand said overall growth in the handheld computer industry is at a rate of 15% to 20% per year, and it should maintain those rates for three to five years.
James said Psion's yearly sales growth for handheld computer products has averaged between 40% and 50%. Sales growth from 1997 to 1998 was 100% (mostly from the industrial market. Both James and St. Amand said VARs could reasonably expect 20% to 30% profit margins in reselling handheld computers. As James said at the close of our interview, "If you look at the projected growth figures for the industry, you won't want to pass up this opportunity."