PDAs hit by smartphone challengers

Handheld devices face increasing competition from converged mobile devices that can perform the same basic tasks as a PDA, according to analysts.

IDC's Worldwide Handheld Qview reported that handheld device shipments increased 3.2 per cent quarter on quarter, but dropped 2.2 per cent over the same quarter a year ago to 2.2 million units.

The analyst said that the most significant development during the quarter was Sony's decision to withdraw from the handheld device market outside Japan, leaving palmOne as the only major Palm OS-powered vendor in the market.

"Despite continuing developments in device technology and simultaneous declines in price points, handheld devices still face stiff competition from an increasing range of converged mobile devices capable of performing basic handheld tasks," said David Linsalata, an analyst in IDC's Mobile Devices programme.

"The key to success for handheld device vendors lies in the complementary integration of advanced technology with improved solutions, such as the GPS bundles embraced by vendors such as HP and palmOne, that will enable the handheld device to evolve beyond its core functionality."

The study also found that, although palmOne's shipments increased only 0.6 per cent year-over-year, the vendor was able to achieve sequential growth of 14.1 per cent and a resulting market share gain of four per cent during the second quarter of 2004.

Despite suffering an 8.2 per cent sequential drop in shipments in the second quarter, and a corresponding drop in market share of 3.0 per cent to 24.1 per cent, HP was found to have increased shipments 39.2 per cent year-over-year.

IDC considers HP "well-positioned" for the future. A range of new handhelds arrives in Europe next month.