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PDA Market Continues Contraction, Palm Remains on Top

IDC's fourth quarter 2007 Handheld PDA report continues to show deep declines, yet IDC says the negative trend may be slowing. According to IDC's Worldwide Handheld QView, vendors shipped a total of 683,004 units in the fourth quarter, marking a 53.2% decrease from the same quarter a year ago and a 6.0% decrease from the previous quarter. For the full year, vendors shipped a total of 3.0 million units worldwide, down 44.3% from the 5.5 million units shipped during all of 2006.

"In most mature markets, the fourth quarter typically brings an increase in shipments to meet holiday demand, but this was not the case for the handheld device market," said Ramon Llamas, senior research analyst with IDC's Mobile Devices Technology and Trends team. "User interest has shifted away from handheld devices to others that can perform the same tasks, but include features that better meet user demand. The best example of this is the converged mobile device, or smartphone, that can do personal information management and other handheld device functions, but can also make phone calls, making it a better alternative for most consumers."

With the handheld device market posting its sixteenth consecutive quarter of year-on-year decline, Llamas does not believe that the market will disappear altogether. "If you look at each quarter during 2007, some of the leading vendors have seen their shipment volumes start to level off. This gives some hope that the market may be finding a sustainable level. Plus, vendors are still introducing new models and reaching first time users. If the market was about to disappear, then neither of these trends would be taking place today."

Top Five Handheld Device Vendors

Palm has had the same models, including the TX, Z22, and Tungsten E2, on the market for more than two years, but not even the lack of a new device has kept the company from the No. 1 position worldwide. Throughout 2007, Palm has steadily increased its quarterly shipments, but shipment volumes remain below 2006 levels.

HP was the clear No. 2 vendor in the handheld device market, and introduced two new devices to its product portfolio: the 211 Enterprise Handheld and 111 Classic Handheld. Despite the heady decline from a year ago, shipments during each quarter of 2007 remained relatively stable from one quarter to the next.

Mio continued to slide throughout the year and, after closing the gap to as little as 60,000 units in the first quarter, the company now trails No. 2 vendor HP by more than 130,000 units. Navigation has become a standard feature on all of Mio's handheld devices, but this pits its handhelds up against the company's competing line of personal navigation devices.

Fujitsu-Siemens was the only vendor among the top five to post positive year-on-year growth, although the improvement was the result of shipping approximately one thousand more units over the previous year. Rather than take a multi-regional approach like other vendors, the company focused solely within EMEA with its Pocket LOOX devices.

Sharp posted the largest year-on-year decline among the leading vendors, but shipped enough of its Zaurus-branded units into Japan to retain the No. 5 slot worldwide and the No. 1 slot in Japan. Within its home region, Sharp accounted for more than half of all handheld device shipments, but as in the rest of the world, shipments of handheld devices there have dropped precipitously.

Top Five Handheld Device Vendors, Q4 2007 Results

Vendor

4Q07

Shipments

4Q07

Market Share

4Q06

Shipments

4Q06

Market Share

4Q07/4Q06

Growth

Palm

343,500

50.3%

582,000

39.9%

-41.0%

HP

188,500

27.6%

364,000

25.0%

-48.2%

Mio

57,914

8.5%

129,027

8.8%

-55.1%

Fujitsu-Siemens

23,124

3.4%

22,297

1.5%

3.7%

Sharp

17,250

2.5%

53,800

3.7%

-67.9%

Others

52,716

7.7%

307,602

21.1%

-82.9%

Total

683,004

100.0%

1,458,726

100.0%

-53.2%

Top Five Handheld Device Vendors, Full Year 2007 Results

Vendor

2007

Shipments

2007

Market Share

2006

Shipments

2006

Market Share

2007/2006

Growth

Palm

1,281,050

42.0%

1,982,000

36.2%

-35.4%

HP

754,800

24.8%

1,210,000

22.1%

-37.6%

Mio

376,139

12.3%

442,893

8.1%

-15.1%

Fujitsu-Siemens

130,534

4.3%

103,491

1.9%

26.1%

Dell

108,175

3.5%

490,000

9.0%

-77.9%

Others

396,849

13.0%

1,245,169

22.7%

-68.1%

Total

3,047,547

100.0%

5,473,553

100.0%

-44.3%

Source: IDC Worldwide Handheld QView, February 11, 2008

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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I want a new PDA

BaalthazaaR @ 2/13/2008 3:19:29 PM # Q
Palm has had the same models, including the TX, Z22, and Tungsten E2, on the market for more than two years, but not even the lack of a new device has kept the company from the No. 1 position worldwide.

Yeah every time I look at getting a new PDA I realize that the best one out there that I would get is one that I have been carrying around for a couple of years.


RE: I want a new PDA
Doo @ 2/13/2008 3:36:06 PM # Q
I agree, give me a new Zodiac2 or TX any day, and I'll get it. It's got to have the big screen (320x480) and lots of memory.

RE: I want a new PDA
BaalthazaaR @ 2/13/2008 3:44:06 PM # Q
Yeah.... I fondled a Centro. The keyboard and the screen are too small. I can't understand why anyone would buy it.
RE: I want a new PDA
OctoberJones @ 2/13/2008 7:26:32 PM # Q
I want a new PDA too, but I've given up hope of Palm ever producing another good one. My T3 is still working fine, and I have a TX sitting in a box for when the T3 finally breaks down. I figure that will carry me past the point at which Palm croaks, and I hope it will carry me until some other good PDA maker arises to take their place.

RE: I want a new PDA
rebelk72 @ 2/13/2008 10:42:20 PM # Q
The problem with pda´s is that they last for years; we - the average consumer - will change a pda only if it breaks or if it is VERY old, but if you take care they will not break. The pda market may have a saturation point and we may be on it now. Cell phones are different: we always change it in 1 or 2 years, even if the phone is working perfectly...

RE: I want a new PDA
twrock @ 2/14/2008 5:33:46 AM # Q
Interesting thought about PDA longevity pattern. However, I'm probably the opposite if that's the norm. I'm on my second cell phone since 2000, but my fourth PDA (and that is only counting my daily users, not my "collector items" like my Zod2).

And yes, before anyone else has the chance to say it, yes, that probably does show that I'm "abnormal".


"twrock is infamous around these parts"
(from my profile over at Brighthand due to my negative 62 rep points rating)

RE: I want a new PDA
BaalthazaaR @ 2/14/2008 10:09:20 AM # Q
I'm "abnormal" too. I'm on my third cellphone in 10 years, but fifth PDA since 2000. It would have been sixth if there was something newer than the TX with all the features that I want.
RE: I want a new PDA
hkklife @ 2/14/2008 11:21:01 AM # Q
Just imagine where Palm would be had they merely done the following updates to their current PDA line:

Z22:
-SD or microSD slot
-~512mb integrated flash storage
-3.5mm Stereo headphone jack
-Multiple color choices (at least white & black)


T|E2:
-Updated OS/app bundle
-64mb RAM
-BT 1.2 OR BT & wi-fi

A more radical concept that I've mentioned here before would be to drop the E2 entirely OR rebuild it entirely, replacing the Graffiti area with a small QWERTY board (modern Treo 90, anyone?) and target it as a Sony MYLO competitor. Basically, a $100-$150 Centro-style PMP/text messaging/e-mail machine for teens who cannot afford a real Centro + service plan. Or as a PDA for diehards who never got the hang of Graffiti

TX:
-Integrated microphone
-Charge/notification LED
-Higher-capacity battery
-Updated OS/app bundle
-2 or 4gb of internal flash storage ala T5
-Faster (416mhz+) CPU
-User-selectable Graffiti 1 or 2


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

RE: I want a new PDA
BaalthazaaR @ 2/14/2008 1:45:23 PM # Q
Toss in a vibrating alarm, and updated wifi for the TX and I'd vote for you as new President of Product Development.
RE: I want a new PDA
PacManFoo @ 2/14/2008 2:18:51 PM # Q
Since he is now the new Pres of Product Development, could you also make the hardware better quality? I miss the days of the Vx/M500 series quality.

PDA's Past and Present:
Palm TX (Number 2)
Palm - IIIxe, Vx, M500, M505, Tungsten T, TX
Handspring - Edge, Platinum, Deluxe
Sony - SJ22
Casio-EM500
Apple - MP110, MP2000, MP2100
RE: I want a new PDA
specterss @ 3/2/2008 8:34:24 AM # Q
Well I don't miss.. my daily pda is still m505 and T3 for occasional work and waiting if m505 dies. I bought it used in not so good condition many years ago. And after some makeup, 32MB real ram (instead 8mb) and 1350mah battery (instead 550mah).. (4th battery) it just doesn't die.

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Where's the iPod Touch?

bulls96 @ 2/13/2008 3:51:45 PM # Q
I was wondering how much of these actually sold and does it go into the "Others" Category in this survey?

RE: Where's the iPod Touch?
Ryan @ 2/13/2008 3:55:18 PM # Q
I'm not 100% sure, but I would image the iPod Touch is not counted in this report given the requirement is that the devices run an OS that can be programmed and run user installable apps. Perhaps when Apple's SDK is released they will be included.
RE: Where's the iPod Touch?
KultiVator @ 2/13/2008 5:27:07 PM # Q
Agreed - as far as I am concerned the iPod Touch is the future (missed by Palm) direction of the PDA.

It's got a long way to go yet - but popular interest is there and the SDK will go down a storm.

It'll be really interesting to see where the iPod Touch is in 12 months time, what apps have appeared and whether Apple evolves the Touch to include more PDA-like features (hint - a slot for some flash memory storage perhaps?).

Fingers crossed for a media-centric PDA renaissance.

RE: Where's the iPod Touch?
rpa @ 2/15/2008 12:04:33 PM # Q
The iPod Touch is what Palm should have done with the Life Drive IMO but failed in execution. Add a GSM radio to the LD and you have an iPhone predecessor. Ah, so many lost opportunities at Palm.

rpa
Palm Pilot >> Palm Tungsten E user
RE: Where's the iPod Touch?
InsGuy @ 2/15/2008 1:08:07 PM # Q
Hey, I couldn't agree more. In fact, all along, I just wanted PIM, photos and music for my pda. Now that the Touch allows Calendar editing, that is all I carry. In addition, there are a ton of products made for the iPod Touch. I think with the SDK coming, we will probably see a whole host of apps written for this thing. Apple may not want it to be a "PDA", but the great majority of the Touch owners may make it as such. In addition, I use Mac computers, so support for this is fine, UNLIKE Palm's direction they took a few years ago, and not really supporting Mac users, which WAS some of their most loyal customers.

Oh well, we can only hope Palm changes, and we'll see what the future brings (if anything).

:-/

All good things...

RE: Where's the iPod Touch?
mikecane @ 2/16/2008 4:14:07 PM # Q
>>>a slot for some flash memory storage perhaps?).

This causes me to wonder. With the Touch now offering 16GB and 32GB, why do you need a slot? No, really, I'm not being snarky here. I have a LifeDrive and even though I have 3GB internally 80% filled, I have just a 1GB SD card, half full. And what's *on* it, media, I hardly ever use. So a 16 or 32GB Touch would be plenty for me without a slot, I think. Even if you packed a ton of movies on it, how many times do you have a two-hour stretch to sit and watch a movie?

RE: Where's the iPod Touch?
hkklife @ 2/22/2008 11:41:24 AM # Q
A removable media slot comes in handy for any NUMBER of things.

I have a 160gb iPod Classic and, despite hating it with a passion, there's no doubt that it packs in a staggering amount of capacity. I have it 2/3 full with my entire music collection in blissfully high bit-rates and still with some room for, say, live gig bootlegs, videos, data storage etc.

Another real-world example I can think of off the top of my head was when I was recently inspecting some property damages at an remote offsite location. I was able to take some pictures that were low resolution & heavily compressed with my "real" digicam but still far exceeded anything the Treo's feeble camera could have done. I then popped the SD card out of my camera into my Treo and e-mailed them to several different parties.

And, of course, a removable media slot allows users to do stuff like have a card full of "personal & confidential" informatioin, or a card full of videos etc. If the iPod Touch had an SDHC slow it could pack 64mb of flash storage instead of 32. Or the iPhone could have 32gb or 48gb instead of 16gb.

No, Apple is like Palmm just with much more R&D prowess and flair...they want to intentionally cripple their devices to keep the overpriced 3rd party accessory ecosystem vibrant and to keep selling users new units that just offer more storage. Why else would Apple continue to resist adding an FM tuner to the iPods as well as user-replacable removable batteries and expansion card slots?

Pilot 1000-->Pilot 5000-->PalmPilot Pro-->IIIe-->Vx-->m505-->T|T-->T|T2-->T|C-->T|T3-->T|T5-->TX-->Verizon Treo 700P-->Verizon 755p

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The PDA is dead?

jimn367 @ 2/13/2008 4:28:50 PM # Q
Yeah a market of 3 million units even with no innovation. Yeah there really isn't a PDA market at all ;)

RE: The PDA is dead?
CFreymarc @ 2/13/2008 7:31:59 PM # Q
There are a lot of people that would want that volume. Even at 10% margin, that is some pretty good profit. I think it is time for the management at Palm to stop listening to their Tony Robbins tapes and start getting productive.
RE: The PDA is dead?
DarthRepublican @ 2/16/2008 4:29:49 AM # Q
Palm already has over 40% (1.2 million out of those 3 million PDAs) of that market, and that share has been growing despite Palm spending virtually nothing on that market. Would they really do any better if they sank millions of dollars into developing new PDAs -- a market which shrank by something like 40% in only one year? As much as I wish it weren't true (I still carry a Treo 680 and a TX to most places), it looks like the PDA market really is dying. Now maybe this would change if somebody put out a Linux powered PDA with 4GB of flash memory (or even a 30GB hard drive) but we have no reason to believe that the market won't continue its downward spiral as smartphones continue to become more powerful. A year from now, the PDA market is more likely to be down to less than 2 million units with Palm's now three year old devices comprising 60% of that market.

RE: The PDA is dead?
hkklife @ 2/16/2008 12:28:21 PM # Q
No, Palm is likely going to EOL all 3 remaining PDA models by this summer and hand over a shrinking but still worthwhile market to whatever competitors remain.



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

RE: The PDA is dead?
SeldomVisitor @ 2/16/2008 1:43:41 PM # Q
> ...that share has been growing...

PALM's total PDA output has shrunk.

That is to say, for example, if there are THREE equal PDA makers, one drops out, and the other two reduce their own output by 50% then the other two's marketshare has grown from 33% to 50% regardless.

And that's what's happened with PALM.


RE: The PDA is dead?
Gekko @ 2/22/2008 10:09:29 AM # Q

The process is bottom up. They give us what the numbers say we want. And the numbers prove that we have a healthy appetite for smartphones and NOT PDAs.

RE: The PDA is dead?
Poopie @ 2/22/2008 12:51:00 PM # Q
worse yet... there really isn't much in the way of brand loyalty for phones. Your company has a deal with carrier x, you get 1 of 5 phones they offer. Get a new phone every 2 years. Probably never the same vendor twice -- unless its Blackberry and that's your company standard. Maybe some people hold on to their phone for 3-4 years. This means that any phone vendor could go to near zero marketshare in less than 4 years simply by not getting asked to dance by one of the big carriers.

PDA brand loyalty on the other hand... well, just look at all of us cranky already-ditched-Palm sourpusses here who *still* waste time, energy, and effort here even after not getting any new models, even after having been burned with upgrades, bugs that won't-be-fixed, etc.

Even those of us that want to see nails in Palm's coffin WANT to see Palm produce another compelling high end, feature-full PDA (with or without a phone).

*THAT* is loyalty.

RE: The PDA is dead?
mikecane @ 2/22/2008 2:12:41 PM # Q
>>>*THAT* is loyalty.

Or masochism.

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