Handheld Retail Software Sales Quadrupled in 2001

Posted By: Ed Friday, March 15, 2002 8:08:38 AM

According to a report from NPD Intelect, the number of software titles sold in retail last year was four times what it was the previous year. Over 900 thousand handheld applications were sold in U.S., while only about 225 thousand were sold in 2000. A startling 97% of the software was for the Palm platform. The best selling category was games, accounting for about 350 thousand software sales, about a third of the total.

The average selling price of an application declined significantly. In 2000, the average price was $42, while in 2001 it was $30. This meant that total revenue didn't increase at the same rate as total sales, though it was were still up substantially. In 2000, the total revenue was $12 million, while in 2001 it was $27.

"The portable software category continues to heat up, and we anticipate that prices will continue to drop. As handhelds become more powerful and the utility of these devices increase, software publishers will likely focus their development and marketing efforts on this key growth segment," said Steve Koenig, senior software analyst for NPDTechworld.

NPD Intelect only tracked software sold in retail stores, not online or through direct sales. This study may be more of a sign of a rise in retail handheld software sales than an indication that handheld software sales in general increased by that much.

In the past, there has been some question whether the average user is even aware that third party software exists or if they are interested in it. Last month, PalmSource released the results of a survey that showed that 82% of Palm users are aware that they can load third-party applications onto their handhelds and 67% have done so.

Thanks to Ari for the tip. -Ed

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WOW!

I.M. Anonymous @ 3/15/2002 8:56:24 AM #
...and that's only retail. I wonder if Palmgear or Handango can release some numbers for us. It would be interesting to know. I buy all my Palm software online. I either go to Palmgear or go strait to the developer's website.

See...Palm is dead! ;-)

Foo Fighter @ 3/15/2002 9:20:54 AM #
What!?! PalmOS only had 97% of the retail software market? This proves that PocketPC is delivering a crushing blow to the Palm platform. It won't be much longer now before Palm finally goes out of business. ;-)

RE: See...Palm is dead! ;-)
I.M. Anonymous @ 3/15/2002 9:26:51 AM #
LOL!

Man, since those numbers are RETAIL only and I've seen the retail selection...not as vast as the online stuff...It would be great to know what the numbers are on online sales.

Ed, is it possible to get numbers from places like Palmgear or Handango?

See...Palm is dead! - indeed
I.M. Anonymous @ 3/15/2002 9:27:21 AM #
Indeed!

These figures are similar to Enrons late 2001.

Who trusts the "experts" on these kind of bought stats is usually the dummy.

History proves that usually the "over" glamouros are the most stinkin fishs.

RE: See...Palm is dead! ;-)
Foo Fighter @ 3/15/2002 9:32:45 AM #
>"These figures are similar to Enrons late 2001."

Well, since this figure is coming directly from NPD Intellect, I doubt there is any "tampering" with the data. My biggest complaint with NPD, and other studies like this, is they fail to count non-retail sales sources. As others have pointed out, both PalmGear and Handango aren't even included. I'm sure the number of download purchased software far exceeds the brick and mortar numbers.

RE: See...Palm is dead! ;-)
I.M. Anonymous @ 3/15/2002 9:41:52 AM #
> Who trusts the "experts"

NPD is one of the largest and most respected market tracking companies. They aren't some fly-by-night organization that you can buy the results you want. They only survive because their results are always unbiased. If you had the time to perform the same research, you would get the exact same results.

RE: See...Palm is dead! ;-)
I.M. Anonymous @ 3/15/2002 10:20:07 AM #
yeah and Enron was the biggest and respectable Energy trading company in the world.

RE: See...Palm is dead! ;-)
I.M. Anonymous @ 3/15/2002 10:22:32 AM #
I see the PPC trolls are out today. There must be emails flying. "97% of handheld software is Palm OS? That looks bad for us. What can we do to protect our jobs? I know, let's try to discredit the company that did the research. It's not much but it's the best I can come up with."

There's no other way to say it, Palm software sales vastly outnumber PPC software sales. If you are a developer, don't waste your time creating PPC apps, make a Palm OS version instead and someone will actually buy your product.

RE: See...Palm is dead! ;-)
I.M. Anonymous @ 3/15/2002 11:12:23 AM #
you do your PPC is fat, battery weakling, expensive and no apps. The other guy does, primitive hardware, pre-ice age OS, inflated claim, and bad business strategy.


what's the big deal?

RE: See...Palm is dead! ;-)
I.M. Anonymous @ 3/16/2002 2:29:57 AM #
...NPD is one of the largest and most respected market tracking companies. ..

True - NPd has at least the credibilty of Anderson (4rth biggest auditor worldwide) - filing for bancrupsy soon for illegal behavoir. Thats the enviroment / partner Palm is getting his figures - they are going the Psion way...

RE: See...Palm is dead! ;-)
I.M. Anonymous @ 3/16/2002 8:26:38 AM #
That's a flat out lie and you know it. But Microsoft has never had a problem lying so I see why it shouldn't bother you Pocket PC trolls. Take a look at Bill Gate's testimony in the Microsoft anti-trust case. It was perjury from one end to the other.
You PPC trolls have to face the face that the platform you worship isn't doing all that well. No one is buying any software. This is going to be a severe blow to everyone thinking about developing for it. If you want to make some money, drop you PPC project and switch to the Palm OS.

RE: See...Palm is dead! ;-)
arielb @ 3/17/2002 1:44:32 AM #
yeah everyone knows retail is dead and that dot coms will rule the world! oh wait it's not 1999 anymore

RE: See...Palm is dead! ;-)
I.M. Anonymous @ 3/17/2002 3:28:31 AM #
...That's a flat out lie and you know it. But Microsoft has never had a problem lying so...

Like Enron, Anderson, Psion, Palm...

Way to Go

I.M. Anonymous @ 3/15/2002 9:37:55 AM #
See, this is what happens when you encourage third party software rather than discouraging it like Microsoft does. Every developer knows that if they write a successful PPC program, Microsoft will write a clone of it and give it away for free.

Wrong!
I.M. Anonymous @ 3/15/2002 10:16:24 AM #
Yeah, I was going to write a flight simulator for Pocket PC in my spare time but figured that Microsoft would steal it. That's not the reason why developers don't write for Pocket PC.

In the U.S. we have two dominant handheld platforms. One dominates unit sales about 5:1. It takes about the same amount of work to write an efficient, robust application that takes advantage of the features of the individual platform.

Therefore, one probably has to do five times as much work per sale (or freeware user) for Pocket PC as for Palm. Fortunately, you can charge a lot more for Pocket PC software since there isn't as much competition. Most developers, however, wouldn't invest in Pocket PC development unless they believe the predictions about WinCE market share that have, thus far, not panned out.

RE: Way to Go
I.M. Anonymous @ 3/15/2002 10:23:51 AM #
I agree 400%

RE: Way to Go
I.M. Anonymous @ 3/15/2002 10:24:08 AM #
LOL

RE: Way to Go
I.M. Anonymous @ 3/15/2002 10:34:23 AM #
> Yeah, I was going to write a flight simulator for
> Pocket PC in my spare time but figured that
> Microsoft would steal it.

I can pretty much guarantee that if you wrote an application for PocketPC that was very successful (probably not a flight sim on a handheld), Microsoft would do their own version of it. They would then use every tactic possible to make sure consumers bought their product over yours. If you don't understand that, you know little about how Microsoft does business.

To the Wrong! person:
I.M. Anonymous @ 3/15/2002 10:46:23 AM #
Actually, it's not that it takes 5 times as much WORK per sale, because you said yourself it take about the same amount of effort for a good PocketPC app as for a Palm app. You're just incurring 5 times as much RISK and are reaching 1/5 of your potential market (assuming potential market is handheld users) by developing solely for PocketPC. But I largely agree with you, and your post was rather level-headed.

In developing a handheld application, one must consider what one needs or wants it to do, and what platforms can it be done on, whether YOUR way is better, different, clever, or unheard of, and whether people will use it (or pay for it). THEN one can consider the platform. I'd say a great majority of USEFUL, NON-MULTIMEDIA/GAME PocketPC applications can be done on the PalmOS. In fact, I'd say they already are. If you know what you are doing, or work with a good coder (and I'm not even saying you have to program in assembly), you can do very good things on the pokey old PalmOS.

JM.

RE: Way to Go
I.M. Anonymous @ 3/15/2002 11:15:26 AM #
if you be so lucky enough have a company with an app that Microsoft needs, it will buy your company. That sure sounds spiffy in the dot.bust era.

RE: Way to Go
I.M. Anonymous @ 3/15/2002 11:27:30 AM #
> it's not that it takes 5 times as much WORK per sale

JM, you missed what he was saying. Same amount of work per platform but 5 times as many sales for the Palm version. So it takes five times as much work per sale.

RE: Way to Go
I.M. Anonymous @ 3/15/2002 12:24:45 PM #
"Wrong!" person here...

I think small time developers, like myself, naturally start with the platform that we are currently using. I mean, it only makes sense. I'm in the medical area and one might argue that a lot of Pocket PC users get their PDA's as part of enterprise solutions such as Allscripts. These users are much less likely to install 3rd party software and, in fact, may be prohibited from doing so.

While it is possible that a small-time developer could develop software that would be attractive to enterprise systems, most such companies are focused on developing their own integrated solutions.

RE: Way to Go
I.M. Anonymous @ 3/16/2002 1:11:02 AM #
Develop an app. for both Palm and PPC. It needs about same efforts. That was what I thought and that was I gave out the quotation. At the end of the project, I just proved myself is a total idot. I made good money on the Palm version but end up spending bunch of un-accoutable times over PPC version.

Next time I will x4 when I need to work on PPC version vs Palm. (I guess I will never get any project at that price :-<).

Remember this! If any one of you have chance to work on PPC. Program that you develops for HP Jornada PPC, it may crash badly on Jornada PocketPC 2002. I don't have to remind you that there are iPaq, Casio, Toshiba ...


AVERAGE software seling price is $30?

I.M. Anonymous @ 3/15/2002 11:53:44 AM #
Geez....the m100 only costs $75. Must be those fancy Doodle apps skewing up the price.

RE: AVERAGE software seling price is $30?
Altema @ 3/15/2002 7:44:32 PM #
I don't think that those prices reflect individual applications, as most (not all) retail software I've seen in Michigan comes bundled in a package. The assortment last year grew quiet a bit. At the beginning of last year there was only a package of demoware (unregistered!), a golf game, and a games package in many stores. Now, a lot of the stores I frequent have at least a dozen or more choices, with some having close to 30 titles. I don't remember any single application I have personally purchased being over $29... the average for me is about $12, but then the only brick and mortar purchase I ever made was Zap!2000 which came with Rock Blaster. I just had to have it right then and there!

Astraware, etc.

I.M. Anonymous @ 3/15/2002 11:58:12 AM #
Bet the folks at Astraware are pretty happy....they're always working hard on new games, too!

RE: Astraware, etc.
I.M. Anonymous @ 3/15/2002 12:44:49 PM #
I am just wonderring if Astraware can survive
on their own game products alone?

Or if they need to work on projects to keep
a profit?

I am always doubting a software company can
survive on games alone, except a couple of established
companies.


ted

RE: Astraware, etc.
Altema @ 3/15/2002 8:03:36 PM #
Astraware has grown doing only games from what I have seen. When I first purchased one of their products, I was able to email the author directly (great guy, I really appreciate him as a person, in addition to his programming skills). Now, the company has grown to the point where they have receptionists fielding emails and calls, but they have not lost their personal touch. (BTW: It has been hinted that new Zap!2000/2016 levels are in the works...)

97%

I.M. Anonymous @ 3/15/2002 5:34:04 PM #
I was amazed by this number, but then I realized you often have to buy apps that "come with" PPC's, like word and excel apps and whatnot. The games figure shows that this isn't it though. I'm sure if you don't count Word/Excel/Etc apps the percentage number would be much lower, though.

RE: 97%
Altema @ 3/15/2002 8:13:53 PM #
Palm and Sony are now giving away Excel, Word, and Power Point compatable software with their new handhelds. Most of the purchasers of these in the retail stores would probably have been for earlier devices. A Palm IIIxe can run Documents to Go, MiniCalc, and WordSmith fine (a little slowly in some cases!), but it would fall into the "Not Included" category you mentioned.

RE: 97%
I.M. Anonymous @ 3/16/2002 2:35:41 AM #
...NPD is one of the largest and most respected market tracking companies. ..
True - NPD has at least the credibilty of Anderson (4th biggest auditor worldwide) - filing for bancrupsy soon for illegal behavoir.
Thats the enviroment / partner Palm is getting his figures from...


1% spent on PPC Games?

Romanov @ 3/16/2002 3:53:00 AM #
Hi,

I once saw an article about Ziosoft where they stated they they were going to bring out more PPC games than Palm games because the "PPC was a better platform". It might be a better platform in their eyes but this data would suggest that such a decision would be commercially wrong.

Nic



Nic Hughes

Misleading data

ginsberg @ 3/18/2002 3:28:36 PM #
There are roughly 14 million Palm OS devices currently in use and over 3 million PPC devices installed. Roughly half of these are in the U.S. market, say 9 million. These 900K PDA software programs therefore represent only one in every ten U.S. PDAs. What is missing is the much larger number of software programs that were downloaded off Web sites. Because Palm has a much larger installed base, it is natural that U.S. retailers will stock (and sell) Palm OS titles before they bother with Windows CE/PPC titles. As such, the NPD data are far from indicative of the overall market.

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