Handheld Shipments Continue Strong Upward Trend

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Thanks to rapid growth in cellular-wireless devices, the number of handhelds shipped worldwide last quarter was up almost 32 percent from the same quarter of the previous year. Approximately 4.5 million units shipped in the July-September period, according to market-research firm Gartner.

Much of the growth in this market was generated by cellular-wireless devices such as Danger’s Sidekick 3, the Nokia E61/E62, and the Motorola Q.

Results by Company.

RIM BlackBerries remained the most popular handhelds, accounting for 21 percent of shipments worldwide during the quarter. However, RIM only grew 10 percent as it continues shifting its focus toward its Pearl and 7100 series of smartphones. BlackBerry smartphone shipments exceeded 514 thousand in the third quarter of 2006, up from 188 thousand one year ago.

T-Mobile Sidekick 3The Sidekick 3 debuted over the summer, and that was enough to push Danger, Inc. into second place in handheld shipments, with 10.5 percent of the world market.

"The Sidekick has achieved near cult status as a wireless messaging device among the 15-to-25 age group in the U.S., which propelled it to nearly 300 percent growth in the third quarter of 2006," said Todd Kort, principal analyst in Gartner’s Computing Platforms Worldwide group. "We have not seen the consumer marketplace gravitate toward a particular PDA model like this since Palm’s peak of popularity over five years ago. The trendiness of this device combined with substantial pent-up demand produced a rush to get on board with the new model."

Palm continued to recede from the PDA market, primarily because it doesn’t have a handheld that offers cellular capabilities, and, because it so heavily focused on smartphones, it hasn’t introduced a new PDA in over a year. Palm’s handheld shipments declined 2.7 percent from the same period last year. However, it shipped 484,000 Treos last quarter, but these are excluded from Gartner’s results because they are smartphones.

Despite the launch of some new models, HP’s PDA business continued to struggle in the third quarter. HP’s worldwide handheld shipments declined 33 percent compared to the same period of last, with shipments totaling about 370,000.   This includes the latest cellular-wireless iPAQs, as Gartner classifies these as handhelds.

Mio Technology ranked fifth in worldwide PDA shipments in the third quarter of 2006 as shipments grew 86 percent from one year ago based on PDAs that feature GPS navigation capabilities.

Declining Prices

The average selling price (ASP) of PDAs during this quarter declined 13 percent from the same period last year to $351.

"An influx of new cellular PDAs which are subsidized to some degree by wireless carriers resulted in a significant drop in ASP and pushed the market to the highest shipments level in PDA market history,” Mr. Kort said. "An estimated 62 percent of all PDAs shipped in the third quarter offered cellular connectivity, up from 49 percent the same time last year."

What’s In a Name?

These results are only for shipments of devices that Garner classifies as PDAs, not smartphones.

Gartner defines a PDA as a data-centric handheld computer weighing less than one pound that is primarily designed for use with both hands. These devices use an open market operating system supported by third-party applications that can be added into the device by end users. They offer instant on/off capability and synchronization of files with a PC. A PDA may offer WAN support for voice, but these are data-first, voice-second devices.

Smartphones offer all the attributes of a PDA, except that smartphones are voice-centric and are designed for primarily a one-handed operation.




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