The worldwide market for handheld devices has experienced its third straight year of decline in 2004.
The decline could be explained by fierce competition from converged devices such as smart phones, analyst firm, IDC, said.
"Consumers don't see the need to invest $US600 in a handheld device if a smart phone can do the same basic tasks," IDC's Mobile Devices program analyst, David Linsalata, said.
In 2004, handheld device shipments slipped to under 10 million devices for the first time in five years. During 2004, 9.2 million units were shipped, which is a decrease of 13 per cent over last year's shipments of 10.6 million devices.
"The vendors haven't been able to break away from the personal information manager-market (PIM)," Linsalata said. "The handheld computer needs to evolve beyond its core functionality."
One such example is Global Positioning System [GPS], which most vendors offer today. However, Linsalata couldn't point out any new drivers that were going to push the market up to the peak levels of 2001.
"Not yet, but the handheld computer has certain adequate advantages such as larger and brighter screens, bigger batteries and attached keyboards," he said.
In 2004, two top vendors, Toshiba and Sony left the handheld market outside of Japan. Linsata doesn't think that indicates a trend.
"I haven't heard anything from the top five vendors," he said. "The handhelds do complement their entire enterprise, offering a mobile solution."
The conversion of handheld computers into smart phones and mobile phones being equipped with PIM features, sometimes makes it difficult to define a handheld device. The devices included in the IDC survey do not include telephony, but may include wireless capabilities that enable Internet access and text communication.
Even though the year-over-year market for handheld devices has declined in the last three years, shipments increased 37.4 percent the last quarter of 2004 probably due to the holiday season.
According to IDC, PalmOne took the top ranking for 2004, shipping 3.6 million handsets worldwide. HP was second (2.5 million). Dell, Sony and Medion rounded out the top five.