Report: handheld market declined again in 2004

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Feb. 02, 2005

Annual worldwide shipments of handheld devices fell again in 2004, to 9.2 million units -- 13 percent below 2003's already lagging numbers -- according to a report released today by IDC. The continued decline stresses an urgent need for manufacturers to evolve their devices beyond personal information management, IDC said.

IDC noted that 2004 was the first year since 1999 that fewer than 10 million units were shipped annually, and that Q4 of 2004 marked the fourth successive quarter of year-over-year shipment declines. Although device shipments increased 37.4 percent over Q3, reflecting holiday seasonality, year-over-year shipments were down 18.7 percent to 2.8 million units, IDE said.

IDC defines "handhelds" as pocket-sized, either pen or keypad-centric, devices that are designed to access and manage data including office documents, multimedia, and games, and that feature "evolved" operating systems and application environments such as Windows Mobile, Palm OS, Linux, or other proprietary platforms with the ability to download, run applications, and store user data beyond their required PIM capabilities. In IDC's definition of handhelds, the devices do not include telephony, but may include wireless capabilities that enable Internet access and text communication.

IDC suggested that the decline is due in part to the "search for relevance that handheld device vendors are facing in today's marketplace." Vendors have had some success with bundled and integrated GPS receivers, but the lack of other compelling solutions continues to limit their ability to expand into new market segments, IDC said.

IDC analyst David Linsalata said, "This drop stresses the urgent need for vendors to evolve their devices beyond personal information management in order to return the market to a growth path."

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