Handspring First Entered Market example essay topic

Handspring SWOT Analysis Strengths 1. Strong Board of Directors. Jeff Harkins, Donna Dubinsky, and Ed Culligan are considered industry leaders. In fact they had been credited with reviving the handheld computing industry. The Palm Pilot which they developed was the most successful product launch in computing history.

2. Good brand identity, strong reputation. By the summer of 2000, Handspring had a 40% market share. There was a four month backlog in orders when Handspring first entered market. 3. Integration of hardware and software for ease of use.

Handspring had a license for the Palm operating system. Hawkins created what he called a "virtual company" to bring hardware design and manufacturing companies together to bring the product to market. Also unlike Palm, Handspring had their hardware and software developer working together to develop a communicator that addressed how people actually use their wireless devices. In developing the Treo, Handspring employed ethnographer who observed how people used their cell phones and PDAs. 4. A company with focused products.

The Visor line was continued to have a large market share in the PDA user market. The Treo line was to focus on the increasing functionality by combine PDAs with Cell phone technology to become a communicator. 5. Convenience seen in all in one Treo product.

Phone + organizer + e-mail + Web Weaknesses 1. Inability to differentiate from competitors. The Palm OS had been licensed to many companies and made up the lion's share of the PDA business. All of the major competitors have the same OS. 2. Low expertise in other areas and functionality.

A Strand Consulting report stated that handspring would have difficulty surviving the smart phone market because the lack experience in the mobile phone market. 3. Profit margins are shrinking despite an 18% increase in sales. This was a result of downward pricing pressures from an increasing amount of competitors. 4. Divided focus of Harkins.

Harkins had recently formed the non-profit Redwood Neuroscience Institute to pursue his lifelong passion for brain research. This of course meant that he no longer 100% focus on Handspring. Opportunities 1. The handheld industry is still changing and currently no company is standing on stable ground. Compaq, Blackberry, Samsung, Kyocera, and Nokia all continue to add new bells and whistles in an attempt to have an edge. Packet PC, is still not a major force.

The public continues to adapt to the all in one communicator units with no one competitor taking the lead. 2. The customers does not know what they want, manufacturers have a large role to play in determining what products are shaping the industry. 3. Highly segmented customer base with different needs, are creating opportunities for product differentiation. Areas such as financial services, government, health care and manufacturing.

4. Virtual company relationships offer an opportunity to expand into the market at a faster rate. Strategic partnerships are a strong positive. This would accelerate the plan to phase out Visor thereby facilitating the expansion of the Treo communicators.

Threats 1. There is high threats from other Palm OS devices and Pocket PCs. Acer, Han Era, Nokia, Sony, and Symbol. These products are inherently similar due to the OS and switching cost amongst the competition is low. The industry is dynamically changing and overlapping with other electronic devices.

These companies are adding PDA functions their own devices. 2. Increasing number of competitors at multiple levels. Nokia. Compaq, RIM / Blackberry, and Microsoft's Pocket PC are making a major push. 3.

Incoming competitors are big-pocket, large corporations (Nokia, Sony, Microsoft) with a much loner history in the electronic business. In Microsoft's case, they are focusing on the enterprise / corporate users. These users want to be able to use programs (Excel, outlook, word) that they are used to using in their business... Blackberry had more than 13,000 companies using its products.

Sony's long-term commitment to R&D and innovation as well as their deep pockets would allow them to enter into the cellular PDA market. 4. Increasing financial losses. Handspring had had a net loss every year since its inception.

Although Handspring had received an additional 57 million in funding in January 2002, Dubinsky knew that the shareholders were expecting profitability in the near future. Consumer reluctance combined with an economic slowdown prevented the company from achieving its fiscal year end 2002 profitability prediction.