IDC: Despite Q4 growth, handheld shipments fall in 2003

Worldwide shipments of handheld devices closed out 2003 about two million units shy of the shipment total posted in 2002 as users continue to favor cell phones and smart phones over the traditional PDA (personal digital assistant), IDC said Tuesday.

Shipments actually grew 3.2 percent in the fourth quarter compared to last year's fourth quarter on the back of a strong consumer holiday shopping season, IDC said. But the 10.4 million units shipped in 2003 dropped 17.9 percent from the 12.6 million units shipped in 2002, the Framingham, Massachusetts, market research company said. Shipments also fell from 2001 to 2002.

For this study, IDC defined handhelds as pocket-size devices that access and manage data. The category has been losing ground to shipments of cell phones with limited data management capabilities as well as smart phones that combine the full functionality of a PDA with a cell phone, IDC said.

In order for handheld vendors to increase shipments, they will have to design devices that offer features that cell phones can't match, such as media players or digital cameras, IDC said. Cell phones with cameras have sold well worldwide, but the image quality produced by camera phones is generally low.

PalmOne Inc. has led the market for handheld devices for several quarters, and maintained that lead in for both the fourth quarter and the full year with about 38 percent market share in both periods.

Hewlett-Packard Co. (HP) posted strong growth in the fourth quarter, doubling the number of shipments in the quarter compared to last year. The wide range of iPaq PDAs that HP introduced over the year helped it boost shipments and remain in second place with 22 percent market share for 2003, IDC said.

Sony Corp. lost ground in 2003 but posted strong growth in the fourth quarter based on excellent holiday sales to remain in third place for both the quarter and year with about 14 percent market share in both periods, IDC said. Dell Inc. completed the fourth quarter and its first full year in the handheld business in fourth place. Sales of the new Axim X3 handhelds helped Dell end the full year with 5.9 percent market share.

The top four positions in the handheld market remained static all year. But Toshiba Corp. lost ground in the fourth quarter to German upstart Medion AG, which sells low-cost PDAs that gained ground with European buyers. Toshiba remained in fifth place for the full year with 3 percent market share, but Medion posted 2.8 percent market share in the fourth quarter.

IDC is a division of International Data Group Inc., parent company of IDG News Service.

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