Market For Handheld Devices Continues To Shrink

Shipments plunged to 919,916 in the first quarter, compared to 1,549,199 the year before. IDC said the sharp downward trend in the market was accelerated by Dell's decision to leave the market.

By W. David Gardner
InformationWeek
May 15, 2007 11:12 AM

The handheld device market is continuing its relentless slide as 36% fewer devices were shipped in the first quarter compared with the same quarter in the previous year, according to a report released Tuesday by IDC.

Shipments plunged to 919,916 in the 2007 quarter versus 1,549,199 the year before. The market research firm said the sharp downward trend in the market was accelerated by Dell's decision to leave the market.

"Dell's exit from the handheld device market underscores the market's decline," said Ramon Llamas, research analyst at IDC's Mobile Device Technology and Trends team, in a prepared statement. "The growing popularity of converged mobile devices combined with the declining prices for laptop computers have put tremendous pressure on the handheld device market."

According to the report, Palm remained the leader in the category, even as its shipments dropped from 475,000 to 295,250 in the first quarter. Palm retained its lead with 32% market share, ahead of Hewlett-Packard, whose 199,400 units shipped were second in the market.

The exception was Mio, which actually gained in shipments and market share, as its popular GPS- and PIM-outfitted handhelds fared well in the market. Mio's P350 and P550 propelled the firm to a 15% market share, up from 6.8% in the previous year's quarter. Mio shipped 138,000 units in the latest quarter.

Still, "the addition of multimedia and GPS features onto handheld devices did not stem their decline because standalone multimedia players and personal navigation devices grew in popularity," Llamas said.

Although Palm's shipments dropped, the company released new competitive models of its Treo, and IDC indicated Palm will introduce followups to its Palm Z22 and Palm TX devices. IDC also observed that HP has kept a healthy competitive position in the market by introducing several new products, including its 510 Voice Messenger, its first non-Qwerty converged mobile device.