Handheld sales slump on: IDC

Sales of handheld devices fell below 1.5 million in the first quarter, marking the ninth consecutive quarter that worldwide shipments of PDAs (personal digital assistants) have declined from their year-over-year marks, according to a study from market research group IDC.

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First quarter shipments of handheld devices totalled 1.47 million, down 22.3 percent from the same quarter a year ago, IDC said.

The demand for handheld devices will stop falling eventually, said Ramon Llamas, a research analyst with IDC.

At a certain point, demand will be sustained by core users who are attracted to new enhancements, such as Bluetooth, Wi-Fi, expandable memory and integrated GPS (global positioning system), he said.

IDC defines handheld devices as pocket-sized electronics that lack telephony, may have wireless e-mail, offer a stylus or keypad for data entry and are capable of synchronizing data with a laptop or desktop PC.

The decline affected all the major vendors, so the segment leaders did not change from recent quarters.

Palm Inc. leads the sector with 32.2 percent market share, followed by Hewlett-Packard Co. with 23.5 percent, Dell Inc. with 9.7 percent and Acer Inc. with 7.5 percent.

The only change was in the fifth spot, where Mio Technology Corp. reversed the market trend by posting an 84.4 percent gain in handheld shipments, compared to the first quarter of 2005. That performance pushed it past Medion AG in the rankings.

The news isn't all bad. Vendors say handhelds still serve as a low-cost way to attract new users.

At Palm, the combined sales figures for handhelds and smart phones continue to grow, said company spokesman Jim Christensen.

"The handheld business is not only profitable but it is growing our installed base, who will later upgrade to a higher-end handheld or a Treo smart phone, which is a great thing," he said.

Sixty percent of users who have never owned a PDA choose Palm's $99 Z22 model as their first handheld, Palm claims.

Palm values that stream of new users so much that the company decided in May 2005 to renew its five-year contract for the Palm OS, he said.