Handhelds a dying breed?

May 8, 2006

IDC put out a report two weeks ago about handheld shipments continuing their decline, which is something that I've been predicting for quite some time. Handheld PDAs such as PocketPCs and Palm Pilots are superceded by Windows Mobile and Palm Treo mobile devices. Why carry two devices when you can have one that does the functionality of both?

An interesting summary of the IDC report's findings:

Following a holiday quarter in which worldwide shipments of handheld devices topped two million units, the worldwide market for handheld devices began 2006 with its ninth consecutive quarter of year-over-year decline. According to IDC's Worldwide Handheld QView, worldwide shipments of handheld devices totaled 1.5 million units, down 22.3% from the same quarter a year ago.

Despite the incorporation of features like Bluetooth, Wi-Fi, expandable memory, and integrated GPS solutions, the handheld market continues to shrink. Many of these same features can be found on mobile phones, and the inclusion of telephony extends the usability of mobile phones beyond that of handheld devices. Still, vendors continue to search for ways to keep their products viable within this space by appealing to first-time and core users, or even joining the converged mobile device (i.e. smartphone) space altogether.
"A decline in shipments following the holiday quarter is expected of mature markets, and the handheld devices market is no different. After nine consecutive quarters of year-over-year decline, many are wondering how long this trend will continue, and whether the market will see a reverse," says Ramon Llamas, research analyst with IDC's Mobile Markets team. "IDC believes that the market will eventually hit a size where the rate of year-over-year decline will slow to a sustainable level. That size has yet to be determined, but will be sustained by the core users of handheld devices as well as the enhancements found on these devices."

Vendor Highlights

Palm, Inc. Palm started off 2006 in much the same way it ended 2005: as the worldwide leader in the handheld market. With shipment volumes 23.3% lower than a year ago, the U.S.-based company was buoyed by the success of the Palm Tungsten E2 and the Palm Z22 handheld. At the same time, shipments of Palm's line of Treo smartphones continue to increase, surpassing shipments of its handheld devices.

Hewlett Packard. Also feeling the effects of the declining market, HP's handheld device shipments decreased 30.3% year over year. With both its professional and home office handheld device lines running on Windows 5.0, HP remains the worldwide leader in Microsoft-powered handheld devices. The company's converged mobile device line also had a year-over-year decrease, but new devices are expected to ship later this year.

Dell. Despite a decline of 33.8% in shipments from a year ago, the U.S.-based company remained the number three vendor worldwide. As the Axim x30 and x50 model lines have reached the end if their product life cycles, Dell has emphasized its x51 lines, which offer greater processing power and features over the other models.

Acer. Of all the vendors in the top five, Acer had the smallest year-over-year decline at 10.8%, staying ahead of fifth place Mio. The company's shipments within Asia/Pacific remained steady while shipments into Europe declined slightly. The company's latest device, the n300, joins a portfolio of Acer's devices that include expandable memory, Bluetooth, and WiFi features.

Mio. Rounding out the top five is Mio, whose shipment volumes increased enough in Europe and Asia to post a healthy year-over-year increase and to edge out Medion for the final spot. Mio was the only vendor within the top five to record a year-over-year increase at an impressive 84.4%. The company continued to offer a suite of handheld devices targeted at different segments of the market, featuring Bluetooth, WiFi, and imaging capability.

Comments to Handhelds a dying breed?

Bernie Jansen :
June 29, 2006 8:57 PM

Great article, it's going to be interesting to watch. The current approach to wireless PDAs is to slap a PDA and a cell phone together and call it smart. We are far from what I predict will become the real mobile device which is a designed from scratch handheld that provides voice, data, video, converged services and is so powerful that it in fact it becomes your only computer. Gone will be the days of synchronizing PDA/Blackberry/Smartphone/... with your PC or the Exchange server. Manufacturers need to stop trying to build a device from the technologies/pieces they currently have and start fresh. What we need is an intelligent device that accesses network services including storage, backup, email, enterprise data, voice, video, etc. The device will support peripherals to ease I/O depending on the owner's current context. Anyhow, you can read my prediction on the future of the hanheld devices: http://www.berniejansen.com/blog/?p=40

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