Handheld sales continue to tank

Worldwide sales of handhelds declined for the fourth consecutive quarter and the downward trend continued into its third year, according to a global market study by research company IDC.

The company found that handheld sales fell 18.7 percent in the fourth quarter compared to the same quarter a year ago. For the full year, 9.2 million handhelds shipped, a decrease of 13 percent compared to 2003, according to IDC. 2004 was the first year since 1999 that total shipments were less than 10 million units, the company said.

An analyst for IDC said that handhelds are becoming old technology and are losing out to converged devices such as smartphones.

"Despite a rise in quarterly shipments due to holiday seasonality and consumer uptake of bundled and integrated GPS receivers, increasingly saturated markets and stiff competition from converged mobile devices drove the handheld device market to its third straight year of decline," David Linsalata, an IDC analyst, said in a statement.

"This drop stresses the urgent need for vendors to evolve their devices beyond personal information management in order to return the market to a growth path."

The study had both good and bad news for palmOne. That vendor continued to be the worldwide leader in handheld sales, the study found, with a 42 percent market share in the fourth quarter of 2004. Its fourth quarter sales increased by almost 60 percent compared to the previous quarter but slipped more than 11 percent compared to the same quarter a year before.

Hewlett-Packard was in second place with a 27.5 percent market share and far more modest sales gains for the quarter than palmOne. Dell was a distant third with a seven percent market share.

For the entire year, palmOne's market share was 39.6 percent compared to HP's 27.1 percent.