IDC's definition of "handheld devices" includes devices that have wireless Internet access and communications capabilities, but excludes units with integrated mobile phone functions, such as Windows Mobile smartphones and Pocket PC Phones.

Palm remained "far and away the worldwide market leader," with just under 35 percent market share, more than the next two vendors combined, IDC said. HP remained the "clear number two vendor" with 19.1 percent of the market, doubling third-place Dell's 9.7 percent share.

IDC noted that while both Palm and HP have added converged devices to their portfolios, Dell has yet to release a converged device.

Growing popularity of converged mobile devices

Ramon Llamas, research analyst with IDC's Mobile Markets Team, cited "the exit of vendors from the handheld market, the shift of vendor focus from handheld devices to converged mobile devices (i.e. smartphones), and the increasing popularity of converged mobile devices overall" as factors contributing to the continued decline.

Llamas went on to warn that the non-phone handhelds market can "expect additional quarters of decline and a flattening out of shipment activity before a return to growth," which will only happen when vendors "discover more market segments, relevant applications, and improved usability beyond personal information management."

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