Features

Popularity of Mobile Devices Hits Handheld Market for the Tenth Y-O-Y Quarter

By Sophia Mayengbam

Worldwide handheld devices market yet again declined for the tenth consecutive quarter year-over-year in the second quarter of 2006. Analysts of IDC attribute the decline to 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.

According to IDC's Worldwide Handheld QView, vendors shipped a total of 1.4 million devices, a 26.3 percent decrease from the same quarter one year ago. For the first half of the year, vendors shipped a total of 2.9 million units, down 21.4 percent from the 3.7 million units shipped during the first half of 2005.

Ramon Llamas, research analyst with IDC's Mobile Markets Team said that the trend in decline is going to continue and a flattening out of shipment activity before a return to growth.

The inclusion of Bluetooth, Wi-Fi, and GPS have kept handheld devices relevant, particularly for core users. However, more applications must be deployed to reach more users and eventually bring about a stabilizing effect to shipment activity.

Palm Inc. posted a year-over-year decline. Despite it the IT research firm said that Palm remained far and away the worldwide market leader of handheld devices with shipments totaling more than the next two vendors combined. In addition to being the leader of handheld devices, Palm has also developed its converged mobile devices, with shipments surpassing its handheld devices.

Top 5 Vendors, Worldwide Handheld Device Shipments and Market Share Q2 2006 (Preliminary) [Source: IDC Worldwide Handheld QView, August 3, 2006]

The number 2 vendor in the handheld devices worldwide continues to be with Hewlett-Packard, with double the shipment volume of the number 3 vendor, Dell. Following the path of Palm and the increasing demand for converged devices HP has been developing its own line of converged mobile devices. However, interestingly, during the second-quarter HP’s handheld devices still outpaced its converged mobile devices.

According to IDC holding steady in the number 3 position was U.S.-based Dell. Over the course of the quarter, Dell continued to tout the Axim X51, having phased out its Axim X30 and X50 products from a year ago. Unlike Palm and HP, Dell has not released a converged mobile device to the market.

Another company to post a decline in its year-over-year this quarter was Taiwanese vendor Mio. Among the top five vendors of handheld devices Mio posted the smallest year-over-year decrease. The company replaced Acer from its fourth position worldwide after trailing by just a thousand units last quarter in the process.

Acer in its fifth position suffered the most amongst the top five vendors. It had the largest year-over-year decline, but still managed to remain ahead of other vendors to lay claim to the number 5 position worldwide. IDC warned that Acer’s position is shaky with a number of vendors trailing closely behind.