IDC: Despite New Product Introductions, Worldwide Market for Handheld Devices Continues to Decline

IDC's latest report on the worldwide handheld device market finds that shipments declined for the seventh consecutive quarter, decreasing 16.9 percent year over year and 8.8 percent in 3Q05 to 1.6 million units. While the overall market declines, IDC notes the industry is still pushing ahead with new products and features.

Even as the overall market continues to trend downwards, device manufacturers are steadily pushing forward with new product introductions, software upgrades, and solution deployment, particularly GPS. Given these improvements and the upcoming holiday season, shipments are expected to increase sequentially but decline year over year in the fourth quarter. At the same time, the growth of converged mobile devices, which combine voice and data capabilities in a single form factor, is placing heightened pressure on the handheld market. Those vendors who offer both devices are starting to see shipments of converged mobile devices equal or surpass shipments of handheld devices. IDC defines handheld devices as not including telephony but could include wireless capabilities that enable Internet access and text communication.

Ramon Llamas at IDC said, "The combination of tremendous competition from converged mobile devices with waning consumer demand for handhelds is forcing manufacturers to search for new or improved solutions that leverage existing hardware and software capabilities. Offering solutions beyond PIM, such as GPS, and reaching out towards first-time users are important steps, but will not necessarily bring about a return to growth. Finding and expanding more solutions to modern mobile consumers and enterprises have become imperatives for the handheld market to drive growth."

Top 5 Vendors, Worldwide Handheld Device Shipments and Market Share, 3Q 2005 (Preliminary)

Rank	Vendor	3Q 2005 Shipments	3Q 2005 Market Share	3Q 2004 Shipments	3Q 2004 Market Share
1	Palm	569,388	33.8%	736,481	36.4%
2	HP	397,016	23.6%	615,515	30.4%
3	Acer	188,760	11.2%	36,232	1.8%
4	Dell	162,000	9.6%	188,200	9.3%
5	Mio	85,609	5.1%	54,172	2.7%
	Others	282,780	16.8%	393,552	19.4%
	Total	1,685,553	100.0%	2,024,152	100.0%

Source: IDC, October 26, 2005