Handheld device sales still slumping

Sales of handheld devices fell below 1.5 million in the first quarter, marking the ninth consecutive year-over-year decline, according to IDC.

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

First quarter shipments of handheld devices totalled 1.47 million, down 22.3 per cent from the same quarter a year ago. Demand for handheld devices will stop falling eventually, a research analyst with IDC, Ramon Llamas, said.

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, he said.

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

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

Palm leads the sector with 32.2 per cent market share, followed by HP with 23.5 per cent, Dell with 9.7 per cent and Acer with 7.5 per cent.

The only change was in the fifth spot, where Mio Technology reversed the market trend by posting an 84.4 per cent gain in handheld shipments, compared to the first quarter of 2005. That performance pushed it past Medion 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, company spokesperson, Jim Christensen, said.

"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 per cent of users who have never owned a PDA choose Palm's Z22 model as their first handheld, Palm claimed.

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.

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