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Handheld computers with PDA functionality are expected to grow to a $10 billion market by 2008. But a majority of this market is likely to be converged smartphones, which combine PDA and cellphone functionality. Within a few years, you can expect to see a PDA/cellphone/camera combination that can surf the Internet through a high-speed phone connection or WiFi and can communicate with other devices through Bluetooth.
On the storage front, the big question is going to be hard drive vs. digital memory card functionality. While the Palm Lifedrive brings a new paradigm to the PDA, it also has problems with speed, battery life and ability to withstand rough handling. Until the hard drive-based PDA can solve those problems, it may not be a big part of the future.