Worldwide Handheld Market Larger for Second Straight Quarter

The worldwide market for handheld devices grew slightly in the fourth quarter of 2003, the second quarter in a row this has happened. However, this growth wasn't enough to make up for weak quarters earlier in the year, so the number of handheld shipped worldwide during 2003 declined.

According to a report just released by market research firm IDC, device shipments last quarter increased 3.2% when compared with the same quarter a year ago. The total number of handhelds shipped worldwide was 3.4 million units.

For the full year, the total handheld market decreased to 10.4 million units; a drop of 17.9% from the previous year's shipments of 12.6 million units.

"With a growing number of vendors and products that combine both personal information management (PIM) capability and telephony, consumers are moving away from devices that offer only PIM capability. HP and palmOne enjoyed particular success during the holiday buying season by offering handheld devices with features beyond PIM that cannot be found in a mobile phone," said David Linsalata, analyst in IDC's Mobile Devices program. "Going forward, handheld device vendors must continue to differentiate and expand into hot product categories, such as media players and digital cameras, to renew growth in their market."

Results by Company

On the strength of the newly released Zire 21, Tungsten E, and Tungsten T3 handhelds, palmOne posted sequential growth of 56.7% and a corresponding increase in market share from 37.5% to 38.5% during the fourth quarter.

Although HP's market share declined from 25.9% in the previous quarter to 25.1% in the last quarter of 2003 due to a significantly larger world market for handhelds, HP more than doubled the number of handhelds it had shipped in the same quarter of 2002. Its most significant release during the quarter was the iPAQ 4150, which combines both Bluetooth and wireless LAN capability in a package barely larger than the company's smallest unconnected device, the iPAQ h1945.

The release of the TJ series gave Sony strong holiday sales and helped it to almost double the number of handhelds it had shipped in the U.S. the previous quarter. However, the company was caught between product cycles and experienced weak growth in other regions, bringing its year-over-year shipments down slightly. It had a market share of 13.9%.

The fourth quarter saw the introduction of Dell's new Axim X3 line of devices, pushing Dell up 21% sequentially and 167.4% year-over-year. With both products being pushed in tandem throughout the world, IDC believes Dell may get back on the growth track it experienced with the introduction of its Axim X5 devices last year. It had 4.8% of the world handheld market during the fourth quarter.

Entering the top 5 vendor list for the first time, relative-newcomer Medion displaced Toshiba for the number 5 position with shipments of almost 100,000 devices, representing sequential growth of 104.2%. With sales coming largely from Europe, Medion has grown on the strength of its low-cost handhelds. It had 2.8% of the market last quarter.

A Look at All of 2003

palmOne no longer dominates the handheld market as it once did, but it still shipped the most units during 2003, giving it 38.1% share of the worldwide market. In second place is HP with 22.0%. Sony is in third place with 13.4%. Dell and Toshiba round out the top 5, with 5.9% and 3.0%, respectively.

Related Links

• European Handheld Sales See Double-Digit Growth
• Widewide Shipments Up for the Third Quarter of 2003