Smartphones kill off the traditional PDA

Demand for unconnected handheld PDA devices continues to plummet in the face of stiff competition from internet-enabled smartphones, market watchers have reported.

According to IDC, the second quarter of 2006 saw the worldwide handheld devices market experienced its tenth consecutive quarter of year-over-year decline. The analyst firm’s latest Worldwide Handheld QView noted that vendors shipped a total of 1.4 million devices, a 26.3 percent decrease from the same quarter one year ago. For the first half of the year, vendors shipped a total of 2.9 million units, down 21.4 percent from the 3.7 million units shipped during the first half of 2005.

"The past 10 quarters have provided a combination of factors that have led to this milestone: the exit of vendors from the handheld market, the shift of vendor focus from handheld devices to converged mobile devices (ie smartphones), and the increasing popularity of converged mobile devices overall, " said Ramon Llamas, research analyst with IDC's Mobile Markets Team.

"Looking ahead, we expect additional quarters of decline and a flattening out of shipment activity before a return to growth. In order to do that, vendors must discover more market segments, relevant applications, and improved usability beyond personal information management. The inclusion of Bluetooth, Wi-Fi, and GPS have kept handheld devices relevant, particularly for core users. However, more applications must be deployed to reach more users and eventually bring about a stabilizing effect to shipment activity."

The research found that Palm, despite posting a year-over-year decline, remained “far and away” the worldwide market leader of handheld devices, with shipments totaling more than the next two vendors combined. In addition to being the leader of handheld devices, Palm has also developed its converged mobile devices, with shipments surpassing its handheld devices.

HP remained the clear number two vendor of handheld devices worldwide, with double the shipment volume of the number three vendor, Dell. Like Palm, HP has been developing its own line of converged mobile devices, but during Q2 HP's handheld devices still outpaced its converged mobile devices, IDC estimates.

Holding steady in the number three position in the IDC rankings was US-based Dell. Over the course of the quarter, Dell continued to tout the Axim X51, having phased out its Axim X30 and X50 products from a year ago.