PDA ship still sinking

Framingham (MA) – Handheld makers saw their market contract substantially for the fifteenth consecutive quarter, according to a research report released today. The market volume is down about 70% from its peak in 2002 and IDC expects this trend to continue for at least another five years.

Playing in the handheld market today - with “handheld” being defined as a PDA without cellphone capability - isn’t much fun. Once again, the shipment volume of such devices declined significantly in the third quarter of this year.

IDC estimates that 728,894 PDAs shipped globally during the period, which is down 39.3% from 1.20 million in Q3 of 2006. Looking back over the past four years, third quarter shipments have shown a steady decline from about 2.3 million in Q3 2003. By Q3 2004, shipments were down to 2.0 million, one year later the number slipped to 1.7 million. In fact, in Q3 2004 Palm shipped more than 736,000 PDAs - more than the global market volume in Q3 2007.

The 2007 PDA market is expected to hit shipments of about 3.5 million units, down from almost 11 million in 2002. IDC analyst Ramon Llamas told TG Daily that the current pace of market decline is still very high and it may “take another five to ten years” until the market levels out. Five years back, the PDA segment looked considerably different, with Toshiba, Sony and Dell aggressively participating in what was then considered to be a lucrative market. Today, those firms are gone and while Palm is still dominating the category, new players such as Mio have emerged. Llamas believes these shifts will be continuing for some time.

In terms of vendor shipments, Palm was able to increase its market share to 44.6%, even if its shipment volume was down 27.8% to 325,000 units year over year. HP remained at #2, with a 17.5% decline in shipments to 198,100. Mio came in third with 81,903 shipped PDAs, followed by Fujitsu-Siemens with 39,519 and Sharp with 17,500.

Llamas said that the PDA market is unlikely to go away completely since it still has “a loyal, if shrinking, following in developed economies, especially among enterprise users. In emerging markets, the appeal of the handheld devices seems anchored in the fact that, in the absence of a monthly service plan, it has a lower total cost of ownership compared to mobile phones and/or the converged mobile device."