Handheld PC sales drop 53 per cent year-over-year

For the past four years, demand for handheld devices without cellular connectivity has been dropping, and the latest IDC figures show shipments plummeted 53 per cent year over year.

Framingham, Mass.-based IDC this week released its Worldwide Handheld QView, which tallies up the number of devices shipped by manufacturers during the third and fourth quarters of 2006 and 2007, and for the entire year both years. Worldwide, customers bought 1,458,726 devices during the fourth quarter of 2006 but only 683,004 during the same period last year, which is a year over year decrease of 53.2 per cent.

The study does not include smart phones or any other device with cellular connectivity, said Ramon Llamas, senior research analyst for IDC’s mobile devices technology and trends team. He added personal digital assistants (PDAs), even those with office productivity software, have limited use. “The handheld handheld has been a great device for us, but the thing is, I need it to do more and I’m finding some other devices that do a heck of a lot better,” he said.

For example, smart phones let users scroll through contact lists and hit a button to call their colleagues while notebook PCs, which are dropping in price, have larger screens and full-sized keyboards.

With handhelds, he said, “Folks can access their data. People can open up their document and say, ‘Okay, this is what so and so has sent me, I can view it, I can read it and I don’t have to wait until I get back to the office or anything like that,’ but the problem is, trying to manage it and trying to edit in on the PDA – that becomes a little bit more of a challenge.”

“Trying to type a message one letter at a time with a stylus in your hand on a virtual keyboard – it’s pretty challenging. It’s not something that you’re going to write a 250-word message on.”

The only vendor reporting an increase in shipments, according to IDC, was Maarssen, Netherlands-based Fujitsu-Siemens Computers BV a firm jointly owned by Fujitsu Ltd. and Siemens AG which sells the Pocket LOOX device. Fujtitsu Siemens had 3.4 per cent of the market, while the leader was Palm Inc. of Sunnyvale, Calif. Palm shipped 343,500 devices during the fourth quarter, down 41 per cent from the same period a year earlier. But its market share grew from 39.9 per cent in the fourth quarter of 2006 to 50.3 per cent during the last quarter of 2007.

“This is company that has a number of devices that aimed at the different market segments,” Llamas said. “If you look at the entry-level Z22 and the more fully-featured TX and Tungsten E1, these guys are designing their PDA so you’re going to get the casual user for appointments, and then you have the more intense user who wants to use it not just for appointments and stuff like that, but they’re trying to use it more for data, and trying to stay connected, obviously via a Wi-Fi hot spot.” The vendor with the largest decrease in the fourth quarter was Sharp Corp. of Osaka, Japan, maker of the Zaurus devices, whose shipments plummeted nearly 68 per cent.

Dell Inc. of Round Rock, Texas was not counted during the fourth quarter because it stopped shipping the Axim handheld in April.

“I anticipate a number of companies will probably exit the market,” Llamas said. “Dell decided about a year ago to say goodbye. I anticipate a couple of others.”

Llamas would not speculate as to which companies might stop selling handhelds.

The second-place manufacturer of handhelds was Hewlett-Packard of Palo Alto, Calif. [LINK http://www.hp.com/] while the third-place vendor was Mio Technology Corp., a GPS receiver manufacturer that makes the DigiWalker P550, a Windows Mobile 5.0 device pre-loaded with Word, Excel and PowerPoint and has Wi-Fi and Bluetooth ports.

“This is a company that has really made a name for itself, with its PDAs but also with its main feature, and that’s navigation,” Llamas said. “If you look at all of their devices, navigation is pretty much the leading feature on board and that’s what they’re trying to popularize.”

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But not all features, especially multimedia programs, are popular on handhelds, he added.

“It seemed like a pretty good idea at the time to have music files on (PDAs), but at the same time, digital music players took off on their own. We can always point to the popularity of the iPod and the Zune and a couple of other really good devices out their, and as luck would have it consumers would prefer to have them independent of the PDA.”

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