A Handheld By Any Other Name

by Reads (21,716)

It isn’t easy trying to follow the trends in the mobile device market.

Handheld sales reached a new record last year, according to market-research firm Gartner. The 14.9 million units shipped was nearly 20 percent higher than the previous record, set in 2001.

On the other hand, rival market-research firm IDC’s results for the same period show that handheld sales are down dramatically.

Neither one of them is making these figures up. It’s simply that each eliminates some models from their handheld results because they consider them smartphones, not handhelds.

And it seems no one can agree what a handheld is and what a smartphone is, including Gartner and IDC.

This is why their results differ so greatly.

For Example…

According to Gartner, Palm, Inc.’s share of the market last year dropped 26 percent. But, in order for this to make sense, you need know that this market-research firm doesn’t consider Palm’s best-selling model — the Treo 650 — to be a handheld. Instead, it is classified as a smartphone, and therefore isn’t included in this company’s handheld results.

If the 1.95 million Treos shipped in 2005 were included, then Palm’s total number of devices shipped last year would total up to 4.72 million.

If these two numbers were combined, it would beat out RIM’s total of handhelds and smartphones, even though Gartner put RIM ahead of Palm in the handheld market.

IDC, on the other hand, says that anything with a cellular-wireless modem is a smartphone. This eliminates some devices that I think clearly are handhelds, like most BlackBerries.

I hope you can see now why it’s not easy to come up with exact figures on how many handhelds were sold last year.

What We Can Say for Sure

Despite this totally messed up situation, there are a few trends that seem clear to me.

I can sum it up in one quick sentence: trends that have been going on for years are still going on, and possibly accelerating.

Sales of traditional handhelds continue to decline. When I say “traditional,” I mean devices that have no cellular-wireless capabilities.

At the same time, sales of converged devices — smartphones and cellular-wireless handhelds — are expected to rise at a rate of more than 60 percent a year.

This is happening with just about every company in this market. RIM is selling fewer handhelds, and its 7100 smartphone now accounts for 25% of its business. Gartner predicts Palm will sell more Treos in 2006 than traditional handhelds.

At least for some time, this means we’re going to get tons of devices using a “candybar” design with a thumb keyboard below the screen. This is what’s selling, and companies would be foolish to ignore this.

But don’t read too much into this. Handhelds aren’t going away. True, demand is declining, but I’m convinced it isn’t going to hit zero. It seems there will always be people who just don’t want a converged device. And as long as there’s demand, there will be companies trying to capitalize on it.

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