RealTime IT News

Handheld Sales Nosedive

The market for handheld computers continued their decline, now reaching nine consecutive quarter of year-over-year decline, according to International Data Corp.

According to IDC's Worldwide Handheld Qview report, worldwide shipments of handheld devices totaled just 1.5 million units in the first quarter of 2006, down 22.3 percent from the same quarter a year ago.

Adding features like Bluetooth, Wi-Fi, expandable memory and integrated GPS solutions hasn't stemmed the tide, and the reason for that is because most of these features can be found on mobile phones. In the end, consumers would rather carry one device, not two.

"The original PDAs had functionality that was interesting when there wasn't an alternative, like a converged phone," says Roger Kay, president of market research firm Endpoint Technologies Associates, in Boston, Mass. "But once you get into the converged phone market you don't want to bother."

In this case, handhelds as a category are rapidly giving way to converged phones that do everything a PDA does plus make phone calls, and the demise of stand-alone handheld devices has been forecast for some time, he says. Of course, the demise of handhelds depends on just who you believe. IDC says they are on the way out, but Gartner Group believes there is still a market.

"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," said Ramon Llamas, research analyst with IDC's Mobile Markets team, in a statement accompanying the report.

"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."

Palm remains the worldwide leader of the market, although volume was off 23.3 percent from the same quarter last year. In a reflection of the smartphone success, Palm's line of Treo smartphones surpassed shipments of its handheld devices.

Hewlett Packard's Windows CE-based devices fell 30.3 percent year over year, but HP remains the worldwide market leader in Microsoft-driven handheld devices. Dell took an even bigger nosedive, down 33.8 percent over the prior year. Acer had the smallest decline, losing only 10.8 percent over the prior year.