Worldwide Handheld Sales Dropped in the Past Year

Shipments of all types of handhelds dropped over the past year. According to figures from IDC, the number of handhelds shipped worldwide during the second quarter of 2002 is 9.3% below the number shipped during the same quarter last year. All of the top handheld vendors have seen their shipments decline except for Sony.

Clearly, the slow world economy is the main cause for this decrease. Individuals and companies are reducing their spending on computers and other kinds of technology. The sharp drop in Hewlett-Packard's sales could indicate that corporations, the major purchasers of the company's Pocket PC models, might be cutting back more than individuals, Palm's and Sony's major customers.

The rest of 2002 doesn't look much better. “Looking a few months ahead, we expect worldwide market growth to remain flat from a year-on-year perspective, for the remaining two quarters of the year,” said Weili Su, senior analyst of IDC’s Smart Handheld Devices research service.

Breaking Down the Numbers
Palm Inc.'s shipments of handhelds declined slightly but, thanks to the decrease in overall shipments, its share of the market increased 1.4 points. During the second quarter of this year, it had 32.2% of the worldwide handheld market and shipped 846 thousand units.

In second place was Hewlett-Packard, which recently combined with Compaq. This company saw its shipments and share of the market decline sharply when compared with the numbers the two companies had during the same quarter last year. Its share of the market dropped from 22.2% to 16.5%. HP shipped 432 thousand units during the second quarter of 2002, down 32.8% from what HP and Compaq shipped in Q2 2001.

Sony was the bright spot in the handheld market. The second quarter of last year was the beginning of the company's serious entry into this market and its sales have increased significantly since then. In Q2 2001, Sony shipped 75 thousand units; last quarter it shipped 261 thousand. This was enough to garner it 10% of the market.

Handspring's shipments and share of the market also dropped but it's important to keep in mind that IDC doesn't consider the Treo a handheld so shipments of it aren't included. The Treo and the Samsung I300 are smartphones, which IDC tracks separately. Just counting the Visor line and the Treo 90, Handspring had 6.5% of the market, or 171 thousand units.

In fifth place is Hi-Tech Wealth, a Pocket PC manufacturer whose products are available only in China.

These numbers aren't retail sales figures. These are the total numbers of handhelds shipped worldwide from manufacturers.

Thanks to Eugene for the tip. -Ed

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OS 5 based handhelds should pick things up

I.M. Anonymous @ 9/11/2002 11:59:04 AM #
Don't you think?
RE: OS 5 based handhelds should pick things up
I.M. Anonymous @ 9/11/2002 12:12:45 PM #
Units running OS5 are pure vaporware so far. The OS is real. Nobody seems anxious to be the first out the door with one, probably for fear of killing their pricing structure witht the OS4 units still piled high on shelves. I would have thought someone would have pulled out an OS5 PDA by now.
I'm actually starting to be pretty miffed about that...
I.M. Anonymous @ 9/11/2002 12:41:16 PM #
My PVx is has been on it's last legs for months now, and I'm determained to wait for a 5.0 machine. Watch out Palm/Sony/etc. I can wait longer then you, and if my Vx dies I might just learn that I _can_ get along with out a PDA!

-Mike

RE: OS 5 based handhelds should pick things up
I.M. Anonymous @ 9/11/2002 12:42:13 PM #
YES - but NOT FOR PALM....as they would be the last to come up with 5.0....and by that time sony might be with 6.0......
Oh boy....I think palm should move its headquaters to the "Plam Graveyard" located on this site.....

Rumors not helping sales
I.M. Anonymous @ 9/11/2002 12:45:25 PM #
I do not claim to know the world, but amongst the folks in my circle of friends. There has been so many rumors and pictures of future devices, who would buy now? Or for that fact, other than one of the dozen new versions of the Clie out this year, why not wait for these 'super' palm units. Phone Palms with MP3 players, new OSs, etc... personally, I jumped on the NR70V unit not being able to wait after my 505 died a wet death.
Anyone else notice that when someone developes a 'newish' technology on the Palm OS devices, they are the ones that get to roll it out first. External memory and Handspring, virtural graffitti and (what was that companies name? TRG? Sorry folks.), 320 x 320 and Sony. Now, the new OS, while other Palm OS device makers may have it, they may not be able to release a unit using it till Palm themselves does.
Just my thoughts, thanks for yours.
RE: OS 5 based handhelds should pick things up
Foo Fighter @ 9/11/2002 12:45:48 PM #
Palm had better release its new line of handhelds no later than early October, or they will lose the preliminary segment of the holiday shopping season. And Palm needs as many sales as it can get.

Personally, I'm getting pretty damn sick of sitting on hands (so to speak) waiting for Tungsten..or whatever its called.

RE: OS 5 based handhelds should pick things up
I.M. Anonymous @ 9/11/2002 1:00:39 PM #
I'm also holding back upgrading my m505 until I see a couple OS 5 models.

> I think palm should move its headquaters to the "Plam Graveyard" located
> on this site.....

Did you read the article and notice that Palm sold more three times as many PDAs as Sony did? Sony's policy of offering frequent new models has helped them get a foothold but they are far from being dominant.

RE: OS 5 based handhelds should pick things up
Ed @ 9/11/2002 1:04:49 PM #
> Now, the new OS, while other Palm OS device makers may have it, they
> may not be able to release a unit using it till Palm themselves does.

I was told by a PalmSource spokesperson that this wasn't the case. All the licensees were given equal access to OS 5. PalmSource is very careful to not be seen as favoring one licensee over another.

I agree that there should be a jump in sales as soon as OS 5 models hit the selves. Anticipation over the new models has to be depressing sales of high-end models at least a bit.

---
News Editor

RE: OS 5 based handhelds should pick things up
Foo Fighter @ 9/11/2002 1:21:10 PM #
> "I agree that there should be a jump in sales as soon as OS 5 models hit the selves."

Has Palm given any indication as to when they (or Sony) plan to release the new hardware?

RE: OS 5 based handhelds should pick things up
I.M. Anonymous @ 9/11/2002 1:26:30 PM #
I have been waiting since spring to purchase Palm's
new high end OS5 PDA. I need six of them and I am
sure they will be great. We have been working with
PalmIII's and they have been trouble free. Should
we have to wait a few more months no problem.

Pointman

RE: OS 5 based handhelds should pick things up
I.M. Anonymous @ 9/11/2002 1:46:48 PM #
Nobody seems anxious to be the first out the door with one, probably for fear of killing their pricing structure witht the OS4 units still piled high on shelves. I would have thought someone would have pulled out an OS5 PDA by now.

Not like HandEra would have tons of stock on the shelves (no retail shelves to speak of), would be nice if they'd capitalize on more of their opportunities, and get something out the door.

RE: OS 5 based handhelds should pick things up
I.M. Anonymous @ 9/11/2002 2:05:03 PM #
"Not like HandEra would have tons of stock on the shelves (no retail shelves to speak of), would be nice if they'd capitalize on more of their opportunities, and get something out the door."

Actually, Handera's in a potentially *worse* situation. If Palm or Sony has a lot of inventory sitting on the shelves, the *retailers* are paying the cost of holding on to those at the moment. Who's paying Handera's inventory holding costs? Handera alone.

RE: OS 5 based handhelds should pick things up
I.M. Anonymous @ 9/11/2002 2:46:59 PM #
> Now, the new OS, while other Palm OS device makers may have it, they
> may not be able to release a unit using it till Palm themselves does.

Other companies may be holding off for compatibilty reasons. I certainly would not want to be the first company on the block with an OS 5 device only to have Palm come out with one next week. Since Palm is likely to sell 10 times as many of whatever they come out with, if I were another company, I'd want to make sure my OS 5 devices were at a minimum completely compatible with Palm's offerings.

RE: OS 5 based handhelds should pick things up
I.M. Anonymous @ 9/11/2002 4:24:44 PM #
I have received a press release (Ed may have it too but be under an NDA) from a well-established company which starts:

"On October 15, 2002, release timed with Palm's OS5 devices, xxxxxx Software will introduce xxxxxx 2.0."

Sounds like someone knows something ...

GO SONY

huggy @ 9/11/2002 12:50:03 PM #
GO SONY GO! :-D

-------------- huggy ---------------
Palm is DEAD!
I.M. Anonymous @ 9/11/2002 3:16:23 PM #
By this time next year, Sony will be the KING of pda business with well over 60% of the market.
RE: Palm is DEAD!
Foo Fighter @ 9/11/2002 3:24:48 PM #
If Palm dies, so does the OS. That would leave Sony with 0% of the PDA market.

RE: GO SONY
I.M. Anonymous @ 9/11/2002 3:26:24 PM #
>> By this time next year, Sony will be the KING of pda business with well over 60% of the market. <<


I seem to remember people saying the same thing last summer.

A Palm Bankruptcy
I.M. Anonymous @ 9/11/2002 3:56:36 PM #
If Palm "dies" that would mean bankruptcy. Simply put, they would have no more money to continue operations. That day may come, and when it does, the company will be broken up into little pieces and sold off. Someone will buy the rights to the OS and that money will go to the people standing in line (Bond holders first, then Stockholders). Usually, there is no money left over for the Stockholders, so they get screwed. They'll sell the office equipment, old inventory, accounts receivable, any real estate, intellectual propert (the OS) etc etc. Maybe Sony would buy the OS in such an event? I think this would be a blessing for Sony because they could buy the OS for peanuts and license it rather than pay license fees. Yes the license fees are cheap now but what might they be in the future?


RE: GO SONY
Foo Fighter @ 9/11/2002 4:25:07 PM #
> "Maybe Sony would buy the OS in such an event? I think this would be a blessing for Sony because they could buy the OS for peanuts and license it rather than pay license fees."

Sony would buy the OS, but it would spell doom for the Palm platform as a whole. For starters, you can kiss the enterprise goodbye. IT departments would never allow Sony into their computing environment, regardless of the fact that it's still the same PalmOS. Even if PalmOS lives on, Palm's demise would prompt the corporate space to standardize on Pocket PC. PalmOS would live on in the consumer space, but only as a niche player...like Apple.

RE: GO SONY
I.M. Anonymous @ 9/11/2002 5:01:17 PM #
Good points, Foo.
...Not to mention...
orb2069 @ 9/11/2002 6:48:38 PM #
That probably one of Sony's first moves would be to pull licencing of competing products.

And with nobody to compete against them, why bother having a low-cost line at all? Remember how long it took for MiniDisk to drop to it's current semi-reasonable price and the introduction of Net-MD? (Hint - It has something to do with the upsurge in MP3 player sales.)

Yay. Sony OS PDAs, starting at $400, just to make sure they undercut Microsoft.

RE: GO SONY
I.M. Anonymous @ 9/11/2002 6:57:18 PM #
>"IT departments would never allow Sony into their computing environment"

Why do you think this is? Why are they any more afraid of Sony as opposed to Palm or MSFT???

RE: GO SONY
I.M. Anonymous @ 9/11/2002 8:50:59 PM #
Just by looking at the MiniDisc comment I know for sure that you don't even know there are alot of companies other than Sony making MD disc and MD player ... yeah even at high price MD was a huge success amoung the music community.
RE: GO SONY
Foo Fighter @ 9/11/2002 11:11:53 PM #
> "Why do you think this is? Why are they any more afraid of Sony as opposed to Palm or MSFT???"

For starters, Sony is synonymous with "proprietary". They tend to force their own intellectual properties over open standards...Memory Sticks being one good example. That's not going to fly. Enterprise want STANDARDS. Secure Digital, Compact Flash and so on. Consumers are more willing to adopt proprietary technologies as part of an integrated package.

Second, Sony is a consumer electronics company, not a platform provider...certainly not where IT is concerned. Sony has ZERO mind-share in corporate America when it comes to computing technology...with the exception of computer monitors and such.

So if Sony does acquire the OS, it would almost certainly keep the platform out of the enterprise. Unless it goes Open-source...at which point ANY developer is free to customize and configure it to their needs, without licensing fees. But then of course you run the risk of platform fragmentation and incompatibilities.

RE: GO SONY
I.M. Anonymous @ 9/13/2002 11:14:14 PM #
1) While Sony lost in consumer video (Beta) they actually won and became the standard in pro analog video (BetaCam).
2) Palm has millions of $$$ in cash. Even with poor sales, it would take them several years to go bankrupt.
3) PalmSource has no cash, but very little required expenses. All they have to do to be profitable is collect their due royalties from Sony, Handspring, Acer, Samsung, et.al., and hire slightly less programmers (and lawyers) than that amount.
4) No other major OS with 1000's of applications (PPC, CE, WindowsXX, linux, MacOSLite?, etc.) can put up a GUI using less battery power, or on a smaller (more pocketable) display, than PalmOS.

Don't look at me!!

Strider_mt2k @ 9/11/2002 1:02:58 PM #
Don't look at me, I bought my M125 a week from now last year!
Over the past year I have also purchased accessories and registered software!

So the rest of you chumps better get moving!
If us poor guys can do it, so can you.
8D

strider_mt2k@yahoo.com

RE: Don't look at me!!
I.M. Anonymous @ 9/11/2002 1:53:15 PM #
Because you bought yours a year ago today, you actually contributed to the decline. :-)
RE: Don't look at me!!
I.M. Anonymous @ 9/11/2002 2:11:18 PM #
That's the funniest response I've seen all day!
RE: Don't look at me!!
Strider_mt2k @ 9/11/2002 4:54:33 PM #
Contributed to the decline!!
Awwww crap.

strider_mt2k@yahoo.com

Not surprising

I.M. Anonymous @ 9/11/2002 12:42:03 PM #
>> "All of the top handheld vendors have seen their shipments decline except for Sony." <<

Looks like Sony, as the article states, is the "bright spot" on the handheld market. Perhaps it's because they've released--and continue to release--quality products with nice developments.

Not that all Palms or Handsprings suck, or anything. Both companies have made good products in the past. BUT, Sony has been the leader in the past 1-2 years when it comes to introducing compelling new products. I believe this is why their shipments continue to increase--people are starting to realize Sony's making good stuff, and they're buying it. And they're getting bored with the current crop from Palm & Handspring.

What's more, Sony hasn't had any embarassing gaffes lately--not like Dubinsky's statement about Springboard, or Palm's m505 and m130 debacles. Yes, there is the MS problem on the NR series, but that's shaping up to be an issue with some units and not with others. It's a support issue, not some monumental brain fart like the whole "m130 supports 65,000 colors" thing.

Can Palm and Handspring increase shipments again? Sure. And Sony's not error-proof and guaranteed to dominate no matter what. But right now, Sony's simply doing a better job, which makes these stats not surprising in the least.

On another note, this should also be a sign that PPC is about to take a tumble. Microsoft homogenized the platform with PPC2002, and HP further homogenized it by discontinuing the Jornada. Who wants an iPaq now, when they're all pretty much the same--ugly, expensive, and with only subtle functional differences? Sony's also got them trumped here, as many models carry the Clie name, but there is true variety in the different models. Heck, even Palm has them trumped. Toshiba has some interesting stuff, but it will not save PPC. Good riddance, I say.

On still another note, OS5 will NOT be some magic elixir that makes people buy handhelds again. It'll drive sales to people who want the latest-and-greatest, but that's all. For the average customer, it'll just be an expensive toy that has more bells and whistles than they need, especially in a sluggish economy. I know I sound like a huge Sony lover here, but I think the latest Clie offerings (though OS4.1) will actually be more successful than the initial OS5 models, regardless of the company that introduces them. I, for one, intend to stick with my NR-70; I'd only upgrade if it breaks down (I have the Best Buy warranty), and if the rumored NR90 becomes a reality.

My $0.02.

RE: Not surprising
I.M. Anonymous @ 9/11/2002 2:48:23 PM #
Although I think Sony is awesome, let's be fair to say that Sony can easily be the "bright spot" because its previous sales is really very little.
RE: Not surprising
I.M. Anonymous @ 9/12/2002 12:24:54 AM #
I agree with just about everything you said. Very true about Palm and Handspring slip-ups. Although I do think PPC has been but a blip on the radar for awhile now, these figures dont say everything. Remember, they are totally different markets, only now with Toshiba offering quality cheap PPC's will the market have a chance to grow. Heck, I almost bought the entry 'e' model but chose the m515 instead due to the OS of course, and it's gorgeous form.

Hopefully handheld sales will pick up on both sides, competition is good. Without the PPC 'power' I dont think Palm users would be hollaring for new MM features on their PDAs, but that is just my guess.

Think ''China''

I.M. Anonymous @ 9/11/2002 3:04:08 PM #
"In fifth place is Hi-Tech Wealth, a Pocket PC manufacturer whose products are available only in China."

I know PalmSource is working on this, but they'd better pick up the pace. It's a big country with a whole lot of potential handheld users.

RE: Think ''China''
I.M. Anonymous @ 9/11/2002 3:17:21 PM #
haven't been paying attention, eh? forget about Acer, did you? They're based in China, and making Chinese only versions of their device. PalmOS is well handled in China, methinks.
RE: Think ''China''
I.M. Anonymous @ 9/11/2002 3:40:46 PM #
HiTech Wealth does have a PPC product.
But they don't really sell it.

Their main products don't use PPC.

No. Only Handspring has a present in mainland China.
PalmOS is very poorly represented in mainland China.

RE: Think ''China''
Ed @ 9/12/2002 9:43:41 AM #
Guys, we aren't having a discussion on China policy or whether the U.S. should recognize Taiwan as a soverign nation. It is off-topic for a handheld site. Go discuss it on a world news site or go to the Off Topic section in our forums:
www.palminfocenter.com/forum/active.asp

Discussing how Palm OS handhelds will fare in the China market, or whether Acer will be a success there, is.

---
News Editor

RE: Think ''China''
I.M. Anonymous @ 9/12/2002 11:36:58 AM #
No, I haven't forgotten about Acer. But, no, they don't have things covered in China. What, one Palm licensee is going to cover China? Heck, Acer'd be happy to have that market to themselves. (BTW, Acer is Taiwanese.)

Hmm, I can heare it now, "Yeah, we were thinking about opening up an office in China, but since Acer is already there, we'll just let them have the whole billion person market to themselves." Wow, that's so altruistic of you!

I don't think you get the point. If a PPC manufacturer can be in the fifth place handheld sales position overall by selling only in China, don't you think that some other companies are missing the boat on this one?

RE: Think ''China''
Ed @ 9/12/2002 11:53:59 AM #
We know for certain Palm hasn't written off China. In early August, Todd Bradley, head of Palm's hardware division and soon to head of the whole company, said that he planed to grow Palm by increasing sales in new markets, instead of mainly concentrating on the U.S. market, where it is already the dominant player. Bradley specifically listed China as one of the markets his company would be working to increase sales in.

I think the Palm OS will have a significant advantage over the Pocket PC in this market because the lower hardware requirements mean Palm handhelds can be less expensive.

However, I don't think the rumored Zire would be successful there because of the difficulties in reading Chinese characters on a 160 by 160 screen. Perhaps a low-end model with a hi-res screen, not unlike the Sony SL10, would be successful there.

Actually, it surprises me we don't hear more about Sony making a big play for China. It has a geographical advantage and the Chinese and Japanese written languages are similar, which should give Sony a special insight into the needs of a Chinese handheld. Have I simply missed Sony's efforts to increase sales in China or is Sony overlooking this market?

---
News Editor

RE: Think ''China''
Smaug @ 9/12/2002 9:20:23 PM #
China is a country of over a billion people, but so what? How many of them can afford a handheld? I would argue 1/20th of those that can afford it in the US. Adjust market share accordingly :)

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