Global Handheld Device Market Shrinking

Although more than two million handheld digital devices were sold over the 2005 holiday season, research firm IDC reports that the beginning of 2006 saw the ninth consecutive decline in handheld device sales worldwide.

For IDC, “handheld devices” doesn’t include smartphones: instead, the term refers to PIMs and pocket-sized devices (either pen- or keypad-based) which are used to run applications, access data, view multimedia, and play games. The devices can can be synched with computers and may include wireless Internet capabilities. IDC counts only branded unit, and discounts all OEM sales from manufacturers.

“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.”

While, handheld device makers are increasingly integrating new features like BlueTooth, WiFi, GPS, and expandable storage, the market continues to be overshadowed by smartphones which integrate similar features and also offer telephony services.

Palm remains the overall leader in the handheld market, although it shipped 23.3 percent fewer units than it did a year ago, although its Treo smartphones surpassed the combined shipments of its handheld device lines. HP and Dell took the number two and three slots, although they also saw unit shipments decline more than 30 percent; Acer came in fourth, seeing a decline of just under 11 percent, and upstart Mio actually saw an substantial 84.4 percent year-to-year increase in sales, primarily in European and Asian markets.