March 23, 2006
 

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Posted: 02.05

Handheld Devices in Decline?

The market for regular old PDAs keeps shrinking as smartphones gain handheld market share.
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Jana McAuliffe




The worldwide market for handheld devices declined for the third consecutive quarter, according to IDC. Handhelds include devices that don’t have voice capability but may have wireless connectivity. According to IDC’s Worldwide Handheld Qview, in the third quarter of 2004, device shipments decreased to 2.1 million units, down 4.6 percent from the second quarter of 2004 and 8.7 percent from the third quarter of 2003.

Although there have been strong shipments for some of the top-five vendors such as Hewlett-Packard and Dell, the market shrunk as palmOne, the market leader, experienced a drop in shipments (down 12.7 percent from last year’s third quarter), and the former number three vendor, Sony, continued to withdraw. Sony has been pulling away from the international market this year, concentrating instead on the Japanese market. Lower barriers to entrance are making it possible for established electronics design companies to quickly enter the market and gain share, but at the expense of margins, as IDC reports, the market is flat or slightly shrinking.

Success in the handheld market, revealed the study, has caught up with the ability to extend the capabilities of handhelds beyond core PIM functionality. “In the face of intense competition from converged devices, the handheld market continues to struggle to evolve beyond its primary role as a PIM device,” says David Linsalata, an analyst in IDC’s Mobile Devices program. “It is crucial that vendors push handheld devices into new market segments through the integration of existing technology, such as GPS bundles, in order to energize this market and return it to a growth path.”
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