World handheld shipments fail to ignite

Handheld device shipments to distribution channels and direct customers dropped nearly 10 per cent year-over-year in the second quarter, according to research firm IDC.

Palm Inc. remains the industry’s perennial leader, with a 32.2 per cent market share during the quarter ended June 30, but Hewlett-Packard Co. vaulted into second place thanks to the combination of its sales with those of recently acquired Compaq Computer Corp. HP’s 16.5 per cent share for the quarter displaced Handspring Inc. from its usual number-two spot: With a 6.5 per cent share, down from 10.3 per cent in the year-ago second quarter, Handspring fell to fourth, trailing Palm, HP and Sony Corp.

That statistic is slightly misleading, though, since Handspring is now focusing on “converged” devices such as its Treo mobile phone/handheld computer combinations, said IDC analyst Weili Su, based in Framingham, Mass. IDC does not count shipments of converged devices in its handheld category.

Worldwide economic weakness is the primary factor behind the overall decline, Su said. Total unit shipments from all vendors fell from 2.89 million in the year-ago quarter to 2.62 million in this year’s second quarter. IDC forecasts flat year-over-year growth during the remaining two quarters of 2002.

Of the top four vendors, Sony was the only one to post an increase in shipments, ratcheting up from 75,000 units shipped in the 2001’s second quarter to 261,380 shipped in 2002’s. That growth bumped Sony’s market share from 2.6 per cent in the year-ago second quarter to 10 per cent in the just-ended quarter.

With an economic recovery unlikely to begin until at least 2003, IDC doesn’t expect the handheld market to regain its steam this year, Su said.