Worldwide shipments of handheld devices dropped significantly in the second quarter of the year, as continued tight budgets and a lack of compelling new applications stifled demand, a report released by IDC this week revealed.
Handheld device shipments dropped 10.7 per cent - to 2.27 million units - in the second quarter compared with the same period a year earlier.
That was a 10.2 per cent sequential drop over the prior quarter, indicating dried-up demand among businesses who have more pressing IT spending priorities, IDC said. A spike in handheld shipments over the holidays also satiated consumers, who had not found compelling enough reasons to replace their older models.
The research company noted that managing personal information was again the leading use of handheld devices and that the industry had yet to come up with a new killer application to drive further growth.
Palm continued to lead the market with 39.9 per cent market share in the second quarter and 903,096 units shipped. The company's Zire 71 models and popular Tungsten C devices buoyed sales, IDC said. Palm's announcement in June that it was buying Handspring put it in a position to reap even more sales in the converged handheld market.
HP trailed Palm's lead with 16.8 per cent of the market, strengthened by its $US299 H1910 model, IDC said. What's more, HP's introduction of five new devices in June set it up to gain more market share in the months to come, the researcher predicted.
Sony came in third with 11.3 per cent of the market, followed by Dell (6.7 per cent). Dell lost ground compared with the previous quarter.
This was, in part, due to its aging Axim device, IDC said.
But while second-quarter shipments represented a bruising drop over the previous year, it was not as severe as the year-over-year decline recorded this time last year, for the second quarter of 2002, IDC said.
This improvement, along with a more encouraging macroeconomic outlook, boded well for the industry, which was set to recover in the second half of the year fuelled by vendor upgrades to their devices and applications, IDC said.