Handheld market takes another nosedive

Framingham (MA) - It is increasingly difficult for PDA manufacturers to sell "unconnected" handhelds. According to a report from IDC, sales in this segment took yet another hit in the third quarter of this year and posted their seventh consecutive decline.

As the global IT landscape goes more and more mobile, the segment that pioneered the idea make data available anywhere, anytime gets left behind. Cellphone capability has developed to be one of the crucial mass market requirements for PDAs and determines their growth potential. The traditional unconnected PDAs - handhelds that may integrate wireless features such as Bluetooth and Wi-Fi but lack the functionality of a cellphone or wireless Internet access - on the other side is pushed back into what appears to be a market niche in the end.

IDC estimates total PDA shipments for the third quarter of this year at about 1.7 million units, down more than 16 percent from Q3 2004 and down almost 9 percent from the second quarter.

Despite the fact that manufacturers introduce new features into handhelds, such as GPS capability, the downward trend for handhelds continues. For the holiday quarter, IDC expects sales to increase sequentially but decline year over year. At the same time connected or converged devices pull ahead : "Converged devices are placing heightened pressure on the handheld market. Those vendors who offer both devices are starting to see shipments of converged mobile devices equal or surpass shipments of handheld devices," IDC said.

IDC analyst Ramon Llamas believes that PDAs will require continued innovation and he is unsure whether GPS alone is enough to bring the segment back on a path of success : "Offering solutions beyond PIM, such as GPS, and reaching out towards first-time users are important steps, but will not necessarily bring about a return to growth. Finding and expanding more solutions to modern mobile consumers and enterprises have become imperatives for the handheld market to drive growth," he said.

Palm and Hewlett-Packard experienced the sharpest impact on their sales with declines of 22.7 and 35.4 percent, respectively and year-over-year. Even Dell, not used to sales declines, saw shipments of its Axim handhelds contracting. Dell lost about 13.9 compared to last year. IDC said that the firm’s direct-sales model and ability to bundle its devices with other packages prevented a steeper decline.

Related stories : PDA market takes another hit, unit sales drop 21 percent in Q2