Market analyst firm IDC reported today that the worldwide market for handheld devices continued to decline in the second quarter of 2003 “due to seasonality and sluggish demand from businesses and consumers alike.” According to IDC's quarterly handheld market report, Worldwide Handheld QView, worldwide handheld device shipments fell by 10.7% in Q2-03 over the same quarter a year ago, and dropped… 10.2% from the previous quarter, to 2.27 million units. Palm maintained the leading position in the market (at 39.9%), while Hewlett-Packard remained the number 2 handheld vendor (at 16.8%), followed by Sony (11.3%), Dell (6.7%), and Toshiba (3.3%), IDC said.

“This quarter illustrates the handheld device market's struggle to grow beyond its roots,” said Ross Sealfon, research analyst for the IDC's Smart Handheld Devices program. “Personal information management is a killer application for 30 million individuals worldwide, but handheld devices lack an application that will further expand their appeal and differentiate them from technologies targeting similar market segments. Combined with worldwide economic uncertainty and an increasingly crowded market, handheld device vendors will have a difficult time building and maintaining market share.”

“After a surge in shipments around the holidays, the handheld device market declined in each of the past two quarters,” IDC said. “In light of other IT priorities and scarce funds, enterprises remain hesitant to invest in handheld device technology. Competition from alternative form factors and limited overall appeal continues to limit consumer interest as well. The decline in 2Q03 was not as steep as the decline experienced in the same quarter one year ago and such a reality, coupled with a brightening macroeconomic outlook, indicates that a more favorable environment for handheld device sales may exist in the second half of the year; such a recovery will also be aided by vendor upgrades of device capabilities and the further integration of wireless connectivity without a significant price increase.”

 
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