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Sales of Handheld Devices Without Voice Plummet

Posted by iNext - 2005-10-29

Consumer sales of handheld devices without voice communications slid for the seventh consecutive quarter, a market research firm said Thursday.
Shipments fell in the third quarter 16.9 percent from the same period a year ago to 1.6 million units, International Data Corp. said. Quarter-to-quarter, shipments dropped 8.8 percent.

The reason for the free fall is competition from mobile devices that combine voice communications with many of the traditional functions of a handheld device, such as personal information management, IDC said. To counter waning consumer demand, manufacturers have introduced new products, software upgrades and global positioning systems.

As a result, shipments are expected to increase quarter-to-quarter during the holiday season, but continue their year-to-year decline, IDC said.

"Offering solutions beyond (personal information management), such as GPS, and reaching out towards first-time users are important steps, but will not necessarily bring about a return to growth," IDC analyst Ramon Llamas said in a statement. "Finding and expanding more solutions to modern mobile consumers and enterprises have become imperatives for the handheld market to drive growth."

IDC defines handheld devices as products without voice communications. The devices, however, could have mobile access to the Web.

Market leader Palm accounted for 33.8 percent of shipments, but experienced a 22.7 percent decline year-to-year. For the first time, sales of the company's converged mobile devices -- a combination of handheld-device capabilities with a cellular phone -- took the lead.

No. 2 Hewlett-Packard Co., which had 23.6 percent of market, saw a decline in shipments of 35.4 percent. Third-place Acer, with 11.2 percent of the market, was the star in the quarter, increasing shipments by 421 percent. The company, however, doesn't have much of a global presence. Most of its shipments were in Europe and Asia/Pacific.

Rounding out the top five were Dell, 9.6 percent of the market; and Mio, 5.1 percent. Dell saw a 13.9 percent drop in shipments from a year ago, but Mio increased shipments by 58 percent, due primarily to the success of its GPS-enabled product lines.

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