Chicago (IL) - Traditional PDAs without phone integration are driven more and more into a market niche. According to IDC, shipments declined more than 18% year, over year ; unit numbers for the year were down almost 17%. The segment begins to become insignificant for large manufacturers - and a playground for smaller vendors instead.

PDA manufacturers had a mixed fourth quarter. While shipments grew 37.6% over Q3 and peaked at 2.2 million units for the year, they weren’t able to save the accelerating pace of declining sales. Compared to 2004, 2005 shipments plunged 16.7% or 1.6 million units from 9.1 million to 7.5 million units. While 7.5 million may still seem a lot, the smartphone and converged devices market has picked up many of the original PDA users and keeps attracting new customers. According to IDC, shipments of converged devices - smartphones and PDAs with PDA functionality - climbed 165% in 2005 and topped 55 million units.

The drop in PDA sales may be large enough to force global PDA manufacturers to rethink their product strategy, IDC indicated. "Vendors with a global footprint still lead the worldwide market, but more and more, vendors with a multi- or even a single region focus have earned top five worldwide status with their focused shipment distribution," said Ramon Llamas, research analyst at IDC’s Mobile Markets group. "The departure of other worldwide vendors has opened the door for smaller vendors to improve their position within the market. During the course of the year, several smaller vendors remained within striking distance of beating each other for the number four or five position, and even posed a challenge to some of the worldwide vendors."

New PDA models offer added and a different functionality than what PDAs did a few years ago. Among key features are GPS, multimedia and Wi-Fi connectivity.

Palm continues to lead the PDA market and sold about 1.02 million units, which was more than double the amount the company sold in Q3, but 13.2% less than in Q4 of 2004. The firm held a market share of 45.6%. Hewlett-Packard increased its sales by 16.9% over Q3, however lost 33.1% over last year. 465,000 PDAs sold translate into a market share of 20.8%. Dell came in third with 178,500 PDAs, almost 10% less than last year, and a share of 8.0%. Acer and Medion round out the top-5 with shipments of 127,000 and 97,000 units, respectively.