Handheld Market Continues to Shrink

By | February 3, 2005

The global market for handheld devices – including PDAs – has experienced its fourth consecutive quarter of sales decline. The slide put the market down almost 19%, well behind the growing cellphone market.

Analysts at IDC said handheld shipments slumped a record 18.7% compared with a year earlier, to 2.8 million units.

2004 is the first time since 1999 that handheld sales have been under 10 million units. It is also the third straight year of decline since 2001. With total sales of 9.2 million units, 2004 was 13% lower in sales than 2003’s 10.6 million units.

Part of the slip was due to Sony and Toshiba abandoning the handheld market for more lucrative consumer electronics sectors.

The only bright spot of the analysis for 2004 was a boost in the fourth quarter due to handheld GPS devices gaining traction over the holiday season.

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

Of the top five manufacturers by market share only Dell and Medion saw a slight rise in sales.

The battle continues to be one between large handheld devices trying to function as phones as well as PDA’s – and media players, video players, etc – versus cell phones which consumers are able to get at well below cost due to phone company incentives on longer term contracts.

Until there is an equilibrium in the market, consumers are unlikely to part with their hard earned cash for devices which are larger, more expensive and only slightly more feature rich than today’s cellular devices.

Leave a Reply