Report finds handheld device market in continued decline

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Oct. 27, 2004

The worldwide market for handheld devices saw its third successive quarter of year-over-year decline in the third quarter of 2004, according to a new report released by IDC. Specifically, handheld device shipments decreased 4.6 percent sequentially and 8.7 percent year over year in the third quarter to 2.1 million units.

Despite strong shipments from HP and Dell, the market shrank due to a drop in shipments from market leader palmOne along with the ongoing withdrawal of former number-three vendor Sony, IDC explained.

IDC uses the term "handheld devices" to refer to devices that do not include telephony but may include wireless capabilities that enable Internet access or text communication. The devices contain embedded operating systems such as Palm OS, Pocket PC, Windows CE, and Linux, and can download and run applications beyond the requisite, preinstalled PIM (personal information management) suite. Additionally, the devices are pocket-sized, either pen or keypad-centric, are capable of synchronizing with desktop or laptop computers, and are designed to access and manage data including office documents, multimedia, and games, IDC says.

IDC in mid-2003 predicted that growth in the "unconnected PDA" market would shift to voice-enabled devices including mobile phones and "converged mobile devices," which it defined as combining the data capabilities of PDAs with the voice communication capabilities of mobile phones.

"In the face of intense competition from converged mobile devices capable of performing basic personal information management tasks, the worldwide handheld device market continues to struggle to evolve beyond its primary role as a PIM device," commented 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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