Framingham (MA) - There is no rescue insight for the struggling handheld market, which faced a steep in decline for the sixth quarter in a row, market research firm IDC reports. Palm and Hewlett-Packard had to give up significant market shares to manufacturers who have begun offering GPS solutions with their PDAs.

The once booming segment of simple handhelds computers, devices without telephony extension, continued its free fall in the second quarter of this year, marking 18 months of consecutive decline in unit sales. According to a report released by market research firm IDC, global handheld market device shipments decreased 20.8 percent compared to the same quarter one year ago and fell 24.9 percent sequentially in Q2 2005 to 1.7 million units.

Despite the negative market development, device manufactures continue to innovate, IDC said. This includes Acer and Yakumo which entered the top-5 ranking as their GPS-enabled devices rapidly gain in popularity. Palm, on the other side, "continues to stretch the definition of a handheld device with the introduction of its LifeDrive mobile manager product," IDC said. Kevin Burden, research manager of IDC’s Mobile Devices program, believes that innovation is necessary to be able to turn the ship back into the wind : "Discovering and developing these new solutions are essential for driving the handheld device beyond PIM and returning the market to growth."

So far, there are no signs that innovation is translating into growth. According to IDC, Palms sales fell in the second quarter from about 924,000 units to about 638,000 year over year. HP’s sales contracted from 530,000 to 322,000. Palm lost about 5.3 percent market share (now 36.5 percent), HP even 5.6 percent (18.4 percent). Acer was the big winner, increasing sales from just 28,000 units in Q2 of 2004 to almost 200,000 units (11.4 percent market share) this year. This pushed the company past Dell, which saw a slight sales increase from 153,000 to about 179,000 units (10.2 percent market share) in the same time frame.

For the whole year, the industry is on track to see yet another sales decrease, which fell in 2004 to 9.2 million devices and below the mark of 1999.

The complete ranking for global Q2 2005 handheld sales :

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