PDA Market Continues Steep Decline

Posted By: Ryan Kairer on Wednesday, August 08, 2007 4:58:56 PM

IDC's latest handheld PDA market report shows a continuing steep decline for market segment. According to IDC's Worldwide Handheld QView, vendors shipped a total of 720,000 units during the second quarter of 2007, a 43.5% decrease from the same quarter one year ago and a 21.8% decrease from the previous quarter. This marked the second consecutive quarter in which total worldwide shipments have not crested above the million unit mark.

Following Dell's decision to withdraw from the handheld device market, other vendors were able to increase their shipments and capture more market share during the 2Q 2007. Overall, however, the handheld device market experienced year-over-year decline as demand decreased and vendors transitioned their resources towards other product lines.

"The departure of a major player allows other vendors to fill the gap and increase shipments. But the market as a whole is still contracting and other vendors, with fewer resources and less distribution, may be forced to withdraw from the market altogether," says Ramon Llamas, research analyst with IDC's Mobile Devices Technology and Trends team. "With double-digit negative growth continuing to characterize the market, IDC expects the handheld device market to contract further before it reaches a stable point."

"Despite the ongoing decline, there continues to be a small but nonetheless significant demand for these devices," continues Llamas. "To drive ongoing demand, vendors have introduced a number of devices that offer features like multimedia, GPS, and wireless, but not cellular, connectivity. But even the inclusion of these new features have not stemmed the decline in shipments. Stability has yet to arrive."

Top Five Handheld Device Vendors

Palm maintained its position as the number 1 vendor worldwide, and its shipments for the second quarter were nearly double that of the number 2 vendor HP. In addition, Palm posted a sequential increase in shipments, bringing to a halt the three consecutive quarters of sequential decline. But even the market leader was not immune to a year-on-year decrease in shipments, as the company relied on devices, like the Z22 and the TX, that have been available for nearly two years.

HP was the clear number 2 vendor by the end of the second quarter, and although it posted both a sequential and year-on-year decline, the company pointed out that its volumes were larger than expected, the result of filling in the gap created by Dell's imminent departure from the market. HP has also been experimenting with optimized handheld devices, including the iPAQ rx 4240 for multimedia and the iPAQ rx 5915 for GPS. Both devices carried a higher price point compared to simple handheld devices, but still moved the handheld devices in a new direction.

Mio posted its fourth consecutive quarter of year-on-year growth, bucking the general trend of the industry and that of the other major vendors. To do this, Mio has relied on the popularity of its P550, P350, and A201 devices, all of which feature a GPS receiver, spreading beyond its home territory of Asia/Pacific and into nearby Europe and Japan. Only recently has the company begun targeting North America.

Dell continued the phase-out of its Axim devices in 2007, as the company's shipments decreased 81.8% from the same quarter a year ago. Dell managed to remain among the top five vendors, but only barely as a number of smaller, regional vendors came within range of Dell's volumes for the period.

Fujitsu-Siemens Computers took fifth place in the second quarter, and did so by concentrating its shipments primarily into Western Europe, unlike other vendors which benefited from a global footprint. While the company has offered both simple devices, like its C Series, and GPS and multimedia-enabled devices, like its N100 Series, it also recently began offering a competing converged mobile device with its with its T Series device.

Top 5 Vendors, Worldwide Handheld Device Market, Second Quarter 2007

Vendor	2Q07 Shipments	2Q07 Market Share	2Q06 Shipments	2Q06 Market Share	2Q07/2Q06 Change
1. Palm	317,300	44.1%	475,000	37.6%	-33.2%
2. HP	168,800	23.5%	260,000	20.6%	-35.1%
3. Mio	97,691	13.6%	91,700	7.3%	6.5%
4. Dell	23,975	3.3%	132,050	10.4%	-81.8%
5. Fujitsu Siemens Computers	21,482	3.0%	28,529	2.3%	-24.7%
Others	89,682	12.5%	277,404	21.9%	-67.7%
Total	718,930	100.0%	1,264,683	100.0%	-43.2%

Source: IDC Worldwide Handheld QView, August 8, 2007

Notes:

Vendor shipments are branded shipments and exclude ODM sales for all vendors.
Handheld devices are pocket-sized, either pen or keypad-centric, and are capable of synchronizing 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 (like Bluetooth and WiFi) that enable Internet access and text communication. These devices feature evolved operating systems or applications environments such as the Palm OS, Windows Mobile Pocket PC, Linux, or other proprietary platforms with the ability to download, run applications, and store user data beyond PIM capabilities.

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Oh noes!

legodude522 @ 8/8/2007 9:21:36 PM #

Axims being phased out in 2207?

Palm m125 > Palm Zire 71 > Tapwave Zodiac 1 > Palm Zire 72 > Sharp Zaurus SL-C1000 + 4gb MicroDrive + Palm Tungsten T|3 (1100mah)
My T|3 is too [i]sexy[/i] for me.

RE: Oh noes!

yugadp @ 8/8/2007 9:31:50 PM #

"Axims being phased out in 2207?"

Or maybe even in 2007. But seriously, I wonder if the PDA market's decline would stop if manufacturers would release some new devices. That hasn't happened in a while...

The Dock is nothing but a glorified Windows Quick Launch bar. Give me a Taskbar or give me death!

RE: Oh noes!

sgiga @ 8/9/2007 2:02:28 AM #

I don't think this reflect the reality. What about all the pda-phones from HTC and others and the different tablets?

I mean, this is like saying that mobile phone sales are declining, if one considers mobile phones to be only those devices with no calendar, sms, email and so on.

RE: Oh noes!

vike @ 8/9/2007 4:13:47 AM #

Yeh, I wonder if Palm were to actually _market_ - say - a VOIP wifi handset / PDA combo device would give that downward spiral another direction? Oh well ..

RE: Oh noes!

SeldomVisitor @ 8/9/2007 7:50:30 AM #

-- http://www.palminfocenter.com/comments/9484/#135208

Well Duh..

OrionNE @ 8/9/2007 10:42:58 AM #

No one is making a PDA worth crap anymore. The battle is all smartphones. So it is no suprise that PDA sales are in the gutter.

RE: Oh noes!

sgiga @ 8/9/2007 3:41:39 PM #

What i meant was that PDA today is equivalent with the HTC line of pda-phones. Just like smartphones are mobile phones with pda capabilities, the HTC pda-phones are pdas with phone capabilities. HTC is selling pda-phones by the millions, and several others are too.

So why are old fashioned pda sales declining? Because HTC are selling pda-phones, and people rather want a pda with a phone than a pda without a phone, that's why. They also rather purchase a N800 also, because there are no pda that comes close regarding performance and usability, he he.

RE: Oh noes!

ChiA @ 8/11/2007 6:59:25 PM #

The simple truth could be that few people and enterprises want or even need a PDA...

Sgiga, can you please tell us what you see as the difference between a PDA with phone capabilities and a phone with PDA capabilities?

I fail to see any difference in the same way that a horse with cart is different from a cart with horse, unless you're fool enough to put the cart before the horse or worse, the horse in the cart!

Also how would you define HTC's s710. It looks and works just like a phone until you slide the keyboard out and then it's a PDA.

PDA market continues to be KILLED off

PacManFoo @ 8/9/2007 10:59:01 AM #

Let's see. I have a Palm TX and I want to upgrade. Well I can get another Palm TX. Guess I'll not upgrade right now. Hence no new sale for Palm. In fact if Palm doesn't release another stand alone PDA they will never receive any more of my money. Maybe they don't care and that is fine. I can trash Palm's name to everyone I know and that could have some effect considering the amount of sales I drove their way in the past. At this point I'm just waiting for someone new to come out with a PDA and have a resurgence in this category. Now what company out there wants my money?

PDA's Past and Present:
Palm - IIIxe, Vx, M500, M505, Tungsten T, TX
Handspring - Edge, Platinum, Deluxe
Sony - SJ22
Apple - MP110, MP2000, MP2100

RE: PDA market continues to be KILLED off

hkklife @ 8/9/2007 12:28:52 PM #

Even a mildly refreshed Z33 (miniSD or SDHC slot, headphone jack) and a TX2 (larger capacity battery, 1gb internal flash, SDHC-capable slot, built-in MIC & charge LED, updated software bundle) would find takers in today's market. It would make sense for Palm to have a few MILDLY refreshed PDAs to debut alongside the Fooleo to bolster their presence at retail.

Remember, a lot of consumers (soccer moms, neolithic sales types etc) still only find out "what's new" from what they see at retail...they don't read magazines, peruse websites, or talk to techie types on a regular basis. Thus, the presence of any kind of Palm product/sighage/branding at the local BB, Staples or Office Depot is an invaluable asset.

2nd thought:
Barring a line of refreshed PDAs, it would be a fantastic move if Palm could somehow sell the GSM Treo 690/Gandolf at $199 unlocked at retail, blister packaging and all. It'd really pull the rug out from the under the carriers strangelehold that exists in the USA and might even let some nervous PDA types dip a toe into Treo waters...try out the device as a "Zire with keyboard" type machine first and then add a SIM card if they want to get online with it.

With "hip" styling (Palm's opinion, not mine) and no external antenna, it could really pass as T|C style PDA or a phone.

Off the top of my head, CompUSA is the only major US retailer (There are no Fry's around here) selling a wide variety of unlocked GSM handsets. But their asking prices are absolutely astronomical!

Pilot 1000-->Pilot 5000-->PalmPilot Pro-->IIIe-->Vx-->m505-->T|T-->T|T2-->T|C-->T|T3-->T|T5-->TX-->Treo 700P

RE: PDA market continues to be KILLED off

sremick @ 8/10/2007 9:47:38 AM #

I'm in the same position, but I have a T3. Would love to upgrade, have the money to do so, and what I would like to do is easily done with today's (truly, even last-year's) technology and within my price-range.... a pricepoint that would still be quite lucrative for whatever company built the thing.

And I'm not alone. For every one of use who get online and find places like PIC and post vocally, there are uncounted hundreds/thousands silently grumbling to themselves.

Yet Palm won't produce the thing. They let their PDA lineup rot then proclaim that the market is obviously dead because no one is buying them, and use that as justification to focus on smartphones. Morons.

http://www.vtbsd.net/

RE: PDA market continues to be KILLED off

Q-man @ 8/10/2007 4:17:17 PM #

The PDA market is committing suicide. I have a Palm m515, which has been great. I would like to upgrade to a TX but I'm afraid that Palm will not support it. I really would prefer NOT to have a smartphone. Things I like about a PDA are the handwriting recognition (grafitti), ease of use of the Palm and what I would like is WIFI capability.
Palm seems determined to exterminate its own handhelds, as people have said, there are no new ones coming out. The Foleo seems to be a stupid idea. Who wants a dumbed-down laptop?
I really hate to see the death of the PDA as I have known it, but Palm seems to want to kill it. A newer version of the TX would restore confidence in the company. The Foleo doesn't cut it.

Palm owner since 3x, now m515, don't want smartphone

RE: PDA market continues to be KILLED off

BaalthazaaR @ 8/10/2007 5:13:46 PM #

Things I like about a PDA are the handwriting recognition (grafitti),

The TX uses grafitti2 which is very annoying... I'd be looking for the original grafitti if they ever release a new PDA.... Although discovering the meaning of the universe seems to be more likely.

RE: PDA market continues to be KILLED off

mtt @ 8/11/2007 1:30:12 PM #

...by the PDA makers. No duh. How do they expect the market to grow when they aren't improving & expanding it any more??? I think there are lots of people who would still carry a PDA, for many uses. However, as we all know, developement has completely stagnated.

PDA's that are also great e-book readers, with bright big sharp screens for entertainment or medical & reference type stuff? PDA's that also have a HD and play music & movies WELL? PDA's that are full featered and 1/4" thick for pocketibility? PDA's with real, good, voice recognition & screen reader capability? PDA' with GOOD browsers to use over WIFI, & a battery that can last all day?

Hmmm. Nope, can't get any of these.

Handspring Visor, Palm V, Treo 180, Treo 90, Treo 600, Treo 650, Treo 700p
MTT

RE: PDA market continues to be KILLED off

Gekko @ 8/11/2007 2:09:25 PM #

yes, and VCR makers are killing off the VCR market.

RE: PDA market continues to be KILLED off

twrock @ 8/11/2007 9:46:40 PM #

Sure they did Gekko. But they also offered us significantly better devices to upgrade to, devices that exceeded the VCR in specs and features.

But that's why some people around here are still using their old PDA's. Palm has yet to offer a true upgrade cf. the specs and features of those people's PDA's. Instead Palm wants us all to upgrade to a single form factor smartphone that is a downgrade cf. too many of the specs and features already present on those "extinct" PDA's the people are holding on to (screen size, Wifi, device size, expandability, battery life, etc.).

When Palm offers a true upgrade, whether it be a smartphone or another PDA, these people will probably buy it. Until then, they'll complain.

Thinking about Vista? Think again: http://www.cs.auckland.ac.nz/~pgut001/pubs/vista_cost.txt
Want an alternative? Try this: http://www.ubuntu.com/ or http://www.mepis.org/

Palm Linux TX?

awawa212 @ 8/10/2007 10:38:16 AM #

It would be very nice to see a Linux TX released with the Foleo, but I doubt it will happen, since it might be deemed a possible risk for cannibalizing prospective Foleo sales.

PDA/mobile computer market dormant.

VampireLestat @ 8/11/2007 8:48:00 PM #

HP is coming out with 5 new devices in September. At least 2 are PDAs I think; one of them a powerful VGA device.

I might get one.
Don't get me wrong, I absolutely love my Treo 680, but I notice I have used the phone once since I got it. All my calls are done at work or at home via VoIP.
I think (just considering it!) I might go back to using an HP PDA is they are cool in the fall. I want the best computer power and experience a PDA can offer. The focus being mobile computing.

Remember when I once said that Palm had an incredibly rare and golden opportunity to swoop into the PDA market and grab is all away from HP and Dell? Dell left, HP had crappy devices out, etc. Well, now, if HP announces great devices next month they might actually swoop in and take it all for themselves.

Treos are cool, but now that I bought a 680, I am convinced more than ever that there is a large dormant PDA market out there waiting for the right device.

Palm Software on sale