February 2, 2005 9:28 AM PST

Handheld market free fall continues

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IDC: Handheld sales continue to slide

October 28, 2004
The global handheld market continued to slide in 2004, with shipments slipping to below 10 million for the first time since 1999, according to a new IDC report.

For the fourth successive quarter in 2004, sales declined on a year-over-year basis to 2.8 million units, the market researcher said Wednesday. For the full year, the figure was 9.2 million units, compared with 10.6 million units in 2003. This is the third successive year of decline since the market's peak in 2001, IDC said.

"Despite a rise in quarterly shipments due to holiday seasonality and consumer uptake of bundled and integrated GPS (Global Positioning System) receivers, increasingly saturated markets and stiff competition from converged mobile devices drove the handheld device market to its third straight year of decline," analyst David Linsalata said in a statement. "This drop stresses the urgent need for vendors to evolve their devices beyond personal information management in order to return the market to a growth path."

IDC's study doesn't track telephony devices such as smart phones or the majority of Research In Motion's Blackberry devices.

PalmOne remained on top of the pack, recording a 59.5 percent sequential gain in shipments. But year-over-year shipments fell by 11.1 percent at Palm. Similarly, despite a quarterly shipment gain of 25 percent, Hewlett-Packard lost 2.7 percent market share due to PalmOne's strong showing, IDC said. HP reported a 10.7 percent year-over-year drop in shipments.

Dell lost 2.2 percent market share in the last quarter of 2004, but it had 4.4 percent sequential and 22 percent year-over-year increase in shipments. The market researcher attributed Dell's better showing to uptake of its x30 and new x50 models.

Medion regained its place in the top-five listing with a sequential rise of 666.7 percent in shipments, mainly due to the push it gave to a major GPS navigation bundle in Europe. GPS devices also helped MiTAC International achieve a 61.4 percent sequential and 444.3 percent year-over-year jump, IDC said. Sony and Toshiba exited the market in 2004.

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Need More Creative Marketing
The PDA vendors should hire me as a Marketing Consultant. I would help them boost sales a lot. I've had my Dell Axim for a few months now, and I love it. I use it for much more than just scheduling and contact management.

Equipped with wireless and 1 gig of storage, the Axim is my super intelligent, portable MP3/MPEG player. I walk around the house and listen to music and watch videos, either from the Axim's local storage or pulled from my main computer over 802.11. When I drive, I take it along and play audio through my car's stereo. When I shop or walk for excercise I listen to my favorite content through headphones. The Axim fits comfortably in my shirtpocket, and I control playback though the jog dial. By turning off the display, I get about 4 hours play time. Driving in the car, I plug it into the cigarette lighter. So, for around $350 I have a very flexible wireless audio/video skipless (no HD) player.

But wait, there's more. I've loaded programs on the Axim that show me street maps, locate ATMs, gas stations, banks, restaurants, etc. I have access to airline schedules and airport maps. I even have local train schedules. Voice over IP (VoIP)? Yes, even that. I walk aound and talk to people using Skype for Pocket PC.

I've barely scratched the surface of what today's PDA can do using off-the-shelf hardware and software. In my opinion, a PDA is a much better value than a stand-alone music player like the IPOD.

* Disclaimer: I do not work for Dell, Palm, or any other PDA vendor. I do not own stock in any of these companies either, and receive no compensation from them.

Keith
www.techcando.com
Posted by Stating (869 comments )
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How does the Treo factor in?
I have been saying for quite a while that "convergence" is an important element the future of the PDA marketplace. IDC does not use "smartphones" (half PDA, half cell phone) in their calculations. Can someone at least tell us what part the Treo accounted for palmOne sales in the recent quarter?

I also believe that the "wireless" or "stand-alone" PDA device is far from dead. There are still numerous applications for these devices in both the consumer and business marketplaces.

Michael Steinberg
President
New England Palm Users Group (Boston)
<a class="jive-link-external" href="http://www.NEPUG.org" target="_newWindow">http://www.NEPUG.org</a>
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