Sales Of Handheld Computers Declining Steadily

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An IDC report records the 10th straight quarter of dropping sales as vendors shift attention to mobile phones.

By Antone Gonsalves
TechWeb

Aug 3, 2006 05:57 PM

Sales of handheld devices have fallen for the 10th consecutive quarter, as the market continues its shift to advanced cellular phones with many of the same capabilities, a research firm said Thursday.

The number of handheld devices shipped in the second quarter ended June 30 dropped 26.3 percent from the same period a year ago to 1.4 million units, International Data Corp. said. For the first half of the year, vendors shipped 2.9 million units, down 21.4 percent from the 3.7 million devices shipped in the first half of 2005.

IDC defines handheld devices as pocket-sized gadgets capable of synchronizing with desktop or laptop computers, but do not include telephony. The devices could, however, include Internet access and text communication, and could also have the ability to download and run applications, and store user data beyond contact lists, address books and calendaring.

During the last two and a half years, vendors have exited the market to focus on mobile phones that contain many of the same functionality, IDC said. The downward trend is expected to continue, eventually flattening out before a return to growth.

"In order to do that, vendors must discover more market segments, relevant applications, and improved usability beyond personal information management," IDC analyst Ramon Llamas said in a statement.

All of the top-five vendors reported double-digit drops in shipments. Palm remained the leader with a 34.6 percent market share, followed by Hewlett-Packard, 20.6 percent; Dell, 9.7 percent; Mio, 6 percent; and Acer, 10.8 percent. Declines in shipments ranged from 69.9 percent for Acer to 17.1 percent for Mio.