The market structure for personal digital assistants would be described as an oligopoly. Oligopoly is an industry type that is characterized by few interdependent sellers. The present PDA market competitors can be split up into 2 different groups: 3Com's Palm Pilot line and "everyone else". 3Com controls 2/3 of the PDA market, while HP, Microsoft, Sharp, Compaq, etc. round out the field. High entry barriers suggest that it's difficult for smaller firms to enter the market. (For ex: large upfront investments in sunk costs). In this oligopolistic market, firms have a mutual interdependence among them. The market is characterized by having any number of buyers. More than 5 million people in the U.S. own a PDA according to market research firm, IDC, up from just 2 million two years ago. The number is expected to more than triple to nearly 17 million by 2005. The PDA is for people who want to access and utilize information in new and innovative ways - personal productivity. It can be used in the office which is a natural environment for data capture technologies - office automation. By using this, field sales associates are able to spend more time selling and less time at the office - sales automation. It can also be used for asset tracking and inventory management, etc. - retail general merchandise. Last but not least, it can be used for patent verification in clinical documentation procedures, etc. - healthcare. Collusion also sometimes occurs within the oligopolistic market. 3Com's strategy has included licensing their operating system to allow and support outside hardware and software complementers in an effort to add value by increasing the functionality of the Palm Pilot products. With more applications to run on the Palm Pilot, they hope to keep customers locked in to their operating system. Well, 8 PDA vendors signed on to use the Microsoft Windows CE operating system and with Windows, these devices will have a much higher ability to act as complementers to the PC through more applications.
