Handheld Device Market Continues to Shrink

Market research firm IDC offered up some bleak numbers for the makers of handheld PDAs and personal information managers (PIMs) driven by pens or keypads: worldwide shipments slumped to 5.5 million units in 2005, with just 1.5 million units shipped in the final quarter of 2006. The numbers represent a decline of 28.5 percent when comparing 2006 to 2005; if you take just the final quarter of those years, the numbers represent a 35.9 percent decline. And IDC only expects the trend to continue during 2007.

What’s crushing the market for handheld devices? Well, everything. Smartphones are getting more and more PDA- and PIM-like features, plus offering wireless networking, multimedia, and Bluetooth. Notebook computers with Wi-Fi, Bluetooth, and 3G networking capability are letting more people take their whole computers on the road, and even GPS units and iPods are nudging into the handheld device space, offering contact and calendar tools along with media playback capability.

“Handheld vendors have expanded their portfolios to include networked devices, and put greater focus on the latter,” says Ramon Llamas, an analyst with IDC’s Mobile Devices Technology and Trends team. “In some cases, a vendor has put more resources to developing its converged mobile device portfolio while its handheld device portfolio has remained largely unchanged. In other cases, a vendor’s total shipments for handheld devices have been less than for its personal navigation devices.”

The top five vendors of handheld devices were Palm, HP, Mio, Dell, and Acer; of those five, only Mio saw both a quarterly and year-on-year increase in shipments, managing to unseat Dell for the number three spot during the fourth quarter of 2006. (If you haven’t heard of them, don’t be alarmed: most of Mio’s products are sold in Europe and Asia.) Year-on-year numbers for other handheld device makers were uniformly depressing, with market leader Palm seeing a decline in shipments of more than 28 percent.

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