Handheld PC business on downward spiral

10 Nov 2006

The worldwide market for handheld devices continued on a downward path during the third quarter of 2006 with the total number of devices shipped reaching 1.1 million units, down 31.3pc on the year.

This marks the eleventh consecutive quarter of year-on-year declines for the worldwide handheld computing market.

“Contributing significantly to the decrease in shipments this quarter was a lack of new devices being announced or shipped to the market,” said Ramon Llamas, research analyst for IDC’s Mobile Markets team.

“Vendors continue to rely on models that have been on the market anywhere between two and four quarters. Without many new devices on the market in the third quarter, it brings into question how shipments will total during the fourth quarter when vendors typically expect a boost in shipments as a result of new devices coming to market,” Llamas said.

The absence of new models does not necessarily mean the end of the handheld market, however. “There are users who remain fiercely loyal to their handheld devices and smaller niche users have emerged,” Llamas added.

“For example, in some developing markets the handheld device has been tremendously important in self education, enabling users to continue learning outside the classroom once they have downloaded content through the PC.

“If usage for specific non-network tasks like self education increase, we could expect an increase in shipments and possibly new devices that are optimised for particular tasks.”

Palm remains the overall market leader but was not immune from seeing its shipments drop year over year. After releasing both the Palm Z22 and the TX nearly a year ago, the company has yet to refresh its portfolio with a device.

HP remains the clear number two vendor in the handheld device market and the largest Microsoft Pocket PC-enabled handheld device vendor, with more than double the shipments of the next two vendors behind it. Of the leading vendors, however, HP suffered the largest year-on-year decline in shipments.

Dell finished the quarter in a tie with Mio for third place. The company has finished phasing out some of the older models from its portfolio and is concentrating on developing the Axim X51 platform with faster processors and more memory.

Having established itself as the number four vendor last quarter, Taiwan-based Mio took another step forward by tying with Dell for the number three position worldwide.

Mio bucked the trend of declining year-on-year shipment levels by posting a 5pc increase from one year ago. The company will face further competition from Dell for the number three position but easily outpaces the next vendor, Sharp.

Sharp saw the largest gain in year-on-year shipments. Several vendors follow closely behind Sharp, however, with fewer than 20,000 units separating it from the likes of ASUSTeK, Acer, and Fujitsu-Siemens.

By John Kennedy