A new research study from market analyst IDC confirms that potential growth for the “unconnected PDA” market is shifting to voice-enabled devices including mobile phones and “converged mobile devices,” which combine the data capabilities of PDAs with the voice communication capabilities of mobile phones.

IDC's research suggests that during 2003, the worldwide handheld device industry will decline by 8.4% to 11.35 million units, its second straight year of decline. While IDC expects limited growth to return in 2004, “dreams of a 20 million unit-a-year market will be replaced by a less than 15 million unit-a-year reality -- a reality that is finding companies like Dell, Handspring, Hewlett-Packard, Palm, and Research-In-Motion looking to converged mobile device production,” IDC said.

“The converged mobile device market will see its strongest year of growth in 2003 as a number of new Symbian OS-powered devices push worldwide shipment totals beyond 13 million units. “As device aesthetics and functionality improve and end-user prices continue to decline, converged mobile devices are becoming increasingly accessible to the mainstream consumer and are expected to ship in greater numbers than traditional handheld devices for the first time in 2003,” commented Kevin Burden, manager of IDC's Mobile Device research team. Burden expects market growth to remain strong throughout 2007 as a growing percentage of mobile phones adopt high-end operating systems; a compound annual growth rate (CAGR) of nearly 86% is expected through the forecast period.

“The killer applications of mobile voice and text communication continue to drive converged mobile device sales upward. As vendor strategies mature, a greater number of voice-centric devices or 'smartphones' are reaching market with significant volume potential as primary-use mobile phones.” noted Alex Slawsby, research analyst in IDC's Mobile Device research team. “Demand for non-voice enabled handheld devices remains depressed as mixed economic conditions, competition from alternative devices, and limited worldwide appeal impact market expansion.”

Here are some specific findings from the IDC report . . .

• Worldwide units shipment of handheld devices will decrease by 8.4% in 2003.
• Rugged pen-based handheld device shipments will approach the volume of rugged keypad-based handheld devices in 2003.
• On the strength of improved form factors, platforms, component technology, and lower price points, converged mobile devices have become increasingly accessible to mass mobile phone users.
• To achieve legitimate success, it's essential that hardware-centric vendors implement plans to move from hardware revenue dependency to a safer, more balanced strategy of technology licensing, solutions selling, or service provisioning.

The report, “Worldwide Smart Handheld Devices Forecast and Analysis, 2003-2007”, presents year-end 2002 vendor market share data for the worldwide handheld device, vertical application device, and converged handheld device markets, and forecasts all form factors, including splits by operating systems, price band, and geographic region through 2007.

 
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