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Handhelds start 2006 poorly

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FOLLOWING a holiday quarter in which shipments topped two million units, the worldwide market for handheld devices began 2006 with its ninth consecutive quarter of year-over-year decline, according to IDC .

Ramon Llamas, research analyst with IDC’s Mobile Markets team, said worldwide shipments of handheld devices totalled 1.5 million units, down 22.3% from the same quarter a year ago.

“Despite the incorporation of features like Bluetooth, WiFi, expandable memory and integrated GPS solutions, the handheld market continues to shrink,” he said.

“Many of these same features can be found on mobile phones, and the inclusion of telephony extends the usability of mobile phones beyond that of handheld devices. Still, vendors continue to search for ways to keep their products viable within this space by appealing to first-time and core users, or even joining the converged mobile device (ie. smartphone) space altogether.”

However, Llamas said a decline in shipments following the holiday quarter is expected of mature markets.

“After nine consecutive quarters of year-over-year decline, many are wondering how long this trend will continue, and whether the market will see a reverse,” he said.

“IDC believes that the market will eventually hit a size where the rate of year-over-year decline will slow to a sustainable level. That size has yet to be determined, but will be sustained by the core users of handheld devices as well as the enhancements found on these devices.”

The top five companies in the worldwide handheld market are Palm, Hewlett Packard , Dell , Acer and Mio. Llamas said Palm started off 2006 with shipment volumes 23.3% lower than a year ago, but the company was buoyed by the success of the Palm Tungsten E2 and Z22 handhelds, and shipments of Treo smartphones continue to increase.

“HP’s handheld device shipments decreased 30.3% year-over-year,” he explained. “The company’s converged mobile device line also had a year-over-year decrease, but new devices are expected to ship later this year.

“Despite a decline of 33.8% in shipments from a year ago, Dell remained the number three vendor worldwide. As the Axim x30 and x50 model lines have reached the end if their product life cycles, the company has emphasised its x51 lines, which offer greater processing power and features over the other models.

“Of all the vendors in the top five, Acer had the smallest year-over-year decline at 10.8%. The company’s shipments within Asia-Pacific remained steady while shipments into Europe declined slightly. The company’s latest device, the n300, joins a portfolio of Acer’s devices that include expandable memory, Bluetooth and WiFi features.

“Rounding out the top five is Mio, whose shipment volumes increased enough in Europe and Asia to post a healthy year-over-year increase and to edge out Medion for the final spot. Mio was the only vendor within the top five to record a year-over-year increase at an impressive 84.4%. The company continued to offer a suite of handheld devices targeted at different segments of the market, featuring Bluetooth, WiFi and imaging capability.”

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