Handheld Sales To See Healthy Increases Through 2006

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In-Stat/MDR has released a report that predicts demand for handhelds will increase in the coming years as they move beyond the early adopter and mobile professional market into the mainstream consumer and corporate markets. The high-tech market research firm estimates that the handheld market will experience a 17.6% compound annual growth rate between 2001 and 2006, with the highest growth rate happening in 2003.

When the world economy improves, In-Stat/MDR expects an increase in corporate purchases of handhelds for use in the workplace, where previously employees were bringing their own handheld. Surveys show that about 10% of the U.S. workforce currently use some sort of handheld for business purposes, though they may purchase these devices individually. Looking forward, growth in the adoption of handhelds for business is expected to be quite strong in the U.S., primarily due to improvements in function, battery life, and pricing.

The report from In-Stat/MDR, called “The Worldwide PDA Market: The Next Generation of Mobile Computing”, makes several other predictions.

The battle between the Palm OS and Pocket PC for market share will heat up as companies introduce New Handhelds running Palm OS 5.0. An In-Stat/MDR U.S. consumer survey revealed that 48.5% of those who currently own a handheld own one made by Palm Inc., and that the highest percentage of those planning to purchase a handheld plan to buy a Palm-branded one.

The ability to access the Internet from a handheld is being increasingly integrated into the device. According to In-Stat/MDR, about 19% of handhelds will offer this functionality in 2002, and this percentage is expected to grow to 70% by 2006.

Handhelds will face increasing competition from smartphones and other converged/combination multimedia devices offering competing functionalities.

The company predicts that virtually all handset and handheld screens will be color by 2008 if several problems can be overcome, like the heavy drain a color screen puts on a handheld’s battery. Another problem is cost. Monochrome displays, with assembled backlights, can range from $7 to $12, but their color counterparts are typically $56 to $72. While a considerable percentage of this difference results from the backlight, which can require high-voltage vacuum fluorescent lighting, the displays themselves are much more complex to manufacture.

The full text of the In-Stat/MDR report is available for $3,300.

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