Worldwide Handheld Shipments Decline Slightly

Posted By: Ryan Tuesday, April 27, 2004 12:15:22 PM

The latest report from the analyst firm IDC states that worldwide handheld device shipments declined 12% from the same quarter last year. The report cites seasonally sluggish demand and vendor re-focusing as many prepare for new Spring product launches.

According to IDC's Worldwide Handheld QView, device shipments decreased 11.7% year-on-year in 1Q04 and dropped sequentially 33.1% to 2.2 million units.

While vendor commitment to entry-level devices at lower price points has helped to grow the handheld user base, many would-be handheld purchasers obtained their devices during the holiday shopping season in the fourth quarter of last year. As a result, despite growth in the European market, the seasonal slump hit vendors particularly hard during the first quarter of this year. The market was also strongly impacted by a number of vendors focusing on trimming down their product offerings and clearing their channels in preparation for spring product launches.

"Despite increasingly powerful handheld devices reaching market, the consumer uptake of entry-level devices available from nearly every vendor calls into question the upgrade path and value posed by the high-end devices. If entry-level devices prove to be the most successful products adopted by consumers, the long-term impact could be acceleration away from hardware differentiation and a further loss of value in the handheld industry," said David Linsalata, analyst in IDC's Mobile Devices program. "Handheld device vendors must continue to search for consumer and enterprise solutions for their products, such as GPS device bundles, that utilize the range of capabilities contained in a handheld device."

Vendor Highlights

palmOne - Hit particularly hard by the seasonality of the handheld market, palmOne posted a sequential decline of 38.7% and a corresponding decrease in market share from 39.4% to 36.1%. However, palmOne will announce two Zire handhelds this quarter and, given the fact that the Zire family has surpassed 3 million units in fewer than 18 months, palmOne's shipments are expected to increase in the near future.

Hewlett Packard - Despite the declining handheld market and a 32.9% sequential drop, HP posted the strongest year-over-year increase among the top 5 vendors with a rise of 24.8%. This increase, based on the strength of an array of devices hitting the entire spectrum of price points, enabled HP to maintain its market share position of 25.7%.

Sony - Caught in the middle of a strategy shift to a streamlined set of products and a focus on improved PIM and other core handheld applications, Sony's market share dropped to single digits on a sequential drop of 57.2% and year-over-year drop of 49.6%.

Dell - Riding the benefit of a fiscal year-end sales push in January as well as Dell's direct sales model, Dell experienced a 1.1% sequential decline in shipments, the lowest drop among the top 5 vendors. Seasonality did take its toll, however, as the company only increased 2.2% year-over-year, bringing its market share up 4.7% to 7%.

Toshiba - Despite a relatively lackluster first quarter with a year-over-year shipment decrease of 34.1% and a sequential decrease of 48.4%, Toshiba reentered the top 5 vendor list this quarter. Toshiba, a constant member of the top 5 vendors since Q302, was knocked out of the top 5 vendor list last quarter by newcomer Medion's strong sales. Medion did not, however, repeat last quarter's performance.
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Top 5 Vendors, Worldwide Handheld Device Shipments and Market
Share, 1Q 2004 (Preliminary)

 Rank            Vendor           1Q 2004 Shipments   1Q 2004 Market
                                                                                     Share
----------------------------------------------------------------------
  1    palmOne                             810,183                    36.1%
----------------------------------------------------------------------
  2    Hewlett-Packard                 577,615                    25.7%
----------------------------------------------------------------------
  3    Sony                                   209,675                     9.3%
----------------------------------------------------------------------
  4    Dell                                    157,399                     7.0%
----------------------------------------------------------------------
  5    Toshiba                               49,067                      2.2%
----------------------------------------------------------------------
       Other                                  442,560                    19.7%
----------------------------------------------------------------------
       Total                                 2,246,499                 100.0%
----------------------------------------------------------------------

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whatsa handheld

Gar @ 4/27/2004 3:59:21 PM #
Like always, the numbers are what you want to read into them. If I believed the numbers; Palm would have gone under years ago because _everyone_ stopped buying Palm handheld devices. Yet somehow we see new ones coming out and very happy new or upgrade buyers.
"Whatsa handheld?": too bad Apple didn't register the mini iPod as a handheld. That would throw everyone's numbers out the window. It does have addresses, dates, applications on it. Just joking, sort of.

-----------------
My wife has to sell a lot of candles (www.ccandles.com) to buy her new Palm.
RE: whatsa handheld
Admin @ 4/27/2004 4:22:17 PM #
The definition IDC uses in their report is:
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 that enable Internet access and text communication. These devices feature evolved operating systems or application environments, such as Palm OS, Pocket PC, Windows CE, Handheld PC 2000, Linux or proprietary solutions and have the ability to download and run applications and store user data beyond their required PIM capabilities.

Basically, it looks like that means everything but smartphones

RE: whatsa handheld
DevPOV @ 4/27/2004 5:11:01 PM #
You jest, but the iPod really sucks as a PIM - read-only information doesn't go far. But with the success of the iPod, think what would happen if Apple DID come out with a PDA with iPod design aspects and marketing. If Apple opened the system then Palm and PPC WOULD be blown away by the sheer numbers. An iPDA would be sexy (I only hope they would have a better name than that).

Lots more reason behind the numbers me thinks

cbowers @ 4/27/2004 4:22:28 PM #
"palmOne - Hit particularly hard by the seasonality of the handheld market"

A very kind comment. On the other hand maybe if PalmOne would put out more hardware comparable to HP's, they might regain some of the mid to high end market. Let's hope PalmOne doesn't get distracted by strong sales into the US market of featureless plasticy crap, when their closest competitor is the likes of HP. It's embarrassing to see PalmOne boast about Zire numbers. Just take the profits meekly with some class, and sink them back into R&D to bring the next Treo and Tungsten products out and soundly answer HP, Dell, Motorola, Sony-Ericsson. And perhaps quality control could use a tweak.

RE: Lots more reason behind the numbers me thinks
Slam @ 4/27/2004 10:14:43 PM #
It is interesting that other is in 3rd place at 19%.
Is there any information about who is in "other"


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