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Handheld device shipments tumble in 2005

Palm maintains lead

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The market for handhelds reached 2.2m units during the fourth quarter, up 37.6 per cent compared to the preceding quarter, according to IDC's Worldwide Handheld Qview.

However, while sales soared during the last three months of 2005, shipment volumes decreased 18.2 per cent compared to the same period in 2004. Moreover, yearly shipments of handheld devices fell by 16.7 per cent from 9.1m units in 2004 to 7.5 million last year.

Handheld devices are pocket-sized, either pen or keypad-centric, and are capable of synchronising with desktop or laptop computers. Handheld devices are designed to access and manage data including office documents, multimedia, and games. Handheld devices do not include telephony but may include wireless capabilities that enable Internet access and text communication.

Palm maintained its position as the worldwide leader within the handheld device market and it currently has 45.6 per cent market share, more than double that of its nearest competitor, HP. Sales of Palm devices rose by 109.7 per cent from the third quarter 2005. But shipments made during the final three months of 2005 were down 13.2 per cent year-over-year.

HP also saw a sharp rise in sales during the last quarter of the year. Shipments were up 16.9 per cent from the third quarter, but were down 33.1 per cent year-over-year. Despite the decline in sales, the company remains the clear number two vendor in the market with 20.8 per cent.

Dell muscled its way into the third spot in the top five handheld device vendors during the fourth quarter due to a 10.2 per cent rise in sales. However, yearly shipment volumes were down 9.2 per cent.

Dell now has eight per cent market share although its position is seen to be insecure given that Acer shipped just 50,000 units less during the final three months of the year. Acer slipped into fourth place on the vendor list due to a 33.1 per cent decrease in sales during the fourth quarter. However, yearly shipments were up by 110.4 per cent and it currently has 5.7 per cent market share.

Rounding out the top five handheld device manufacturers is Medion. The German firm saw shipments rise by a whopping 287.9 per cent during the fourth quarter, the largest sequential increase of any of the top five vendors. However, shipments decreased 15.7 per cent year-over-year and it now has 4.3 per cent market share.

According to IDC, Medion, which conducts the majority of its business in Western Europe, is an example of the newer type of vendors entering the market.

"Vendors with a global footprint still lead the worldwide market, but more and more, vendors with a multi- or even a single region focus have earned top five worldwide status with their focused shipment distribution," said Ramon Llamas, research analyst at IDC's Mobile Markets group.

"The departure of other worldwide vendors has opened the door for smaller vendors to improve their position within the market. During the course of the year, several smaller vendors remained within striking distance of beating each other for the number four or five position, and even posed a challenge to some of the worldwide vendors."

Although the market has been under immense pressure by the rise in shipments of converged mobile devices, Llamas adds that vendors still remain committed to the handheld market.

"New devices continue to come out from the market leaders, aimed at different user types and offered at different price points. With the addition of GPS solutions, multimedia capability, and WiFi connectivity, handhelds offer additional value beyond just PIM for the user."

Copyright © 2006, ENN

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