In contrast to yesterday's Canalys report of booming sales of converged mobile devices, IDC reported today that the worldwide market for handhelds suffered its seventh consecutive quarter of year-over-year decline. Q3 2005 shipments decreased 16.9 percent year-over-year, and 8.8 percent sequentially, to 1.6 million units, according to IDC.

Nonetheless, IDC noted that even in the face of the market's continued downward trend, device manufacturers are forging ahead with software upgrades and new product introductions, such as GPS-based devices. Last quarter the company noted that GPS-enabled PDAs were the one bright spot in an otherwise dismal picture. With new products and the upcoming holiday season, IDC expects fourth quarter shipments to show a sequential increase, but nevertheless a continued year-over-year decrease.

The top five vendors and their respective marketshare percentages in Q3, according to IDC, were Palm (33.8 percent), HP at 23.6 percent, Acer (11.2 percent), Dell (9.6 percent), and Mio (5.1 percent), as shown in the following chart.

Top 5 PDA vendors in Q3 2005, by marketshare percentages
Mio, the only newcomer to the top five, scored an impressive 58 percent increase over last year on the strength of its GPS-enabled 168, 268, and 269-series product lines, IDC said. Third place Acer saw 5.3 percent sequential growth and an “astounding” 421.0 percent year-over-year growth. IDC suggested that Acer may have benefitted from the departure of other companies from the market, along with the continued popularity of its n35 device.

“The combination of tremendous competition from converged mobile devices with waning consumer demand for handhelds is forcing manufacturers to search for new or improved solutions that leverage existing hardware and software capabilities,” said Ramon Llamas, research analyst in IDC's Mobile Markets program. “Offering solutions beyond PIM, such as GPS, and reaching out towards first-time users are important steps, but will not necessarily bring about a return to growth. Finding and expanding more solutions to modern mobile consumers and enterprises have become imperatives for the handheld market to drive growth.”

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