Handhelds under fire from smarter phones

Handhelds under fire from smarter phones

Handheld shipments continued to decline worldwide in the first quarter, as poor consumer confidence, tight IT budgets and more sophisticated phones took their toll on sales of PDAs (personal digital assistants), according to analyst group IDC.

But the worldwide decline was not being felt locally in Australia, channel analysts, Inform, said.

Inform has seen a handheld computer growth rate of around 8 to 10 per cent, mainly driven by high sales of Palm’s Zire and Tungsten models in late 2001.

“We were expecting flat, possibly negative growth, but the new Palm’s really shot the market up,” Inform analyst, Luke Solyom, said.

Vendors shipped 2.45 million units in the quarter worldwide, down 21.3 per cent from the first quarter of 2002 when 3.16 million units were shipped. The first-quarter decline comes on the heels of a full-year decline in handheld shipments, which appear to have been more affected by the prolonged economic downturn of the past few years than PCs.

IDC defined a handheld device as "a pocket-size device, either pen or keypad-centric, (that is) capable of synchronising with desktop or laptop computers. Handheld devices are designed to access and manage data including office documents, multimedia, and games. (They) do not include telephony but may include wireless capabilities which enable Internet access and text communication."

In the worldwide market, it is the burgeoning technology of “smart phones” that is seen as the biggest threat to the PDA market.

"The market opportunity is evolving toward high-functionality mobile phones, with voice as the 'killer app,'" IDC analyst, Alex Slawsby, said.

Pure handhelds without voice capabilities only appealed to a small market of business professionals, while consumers were much more interested in voice technology, especially with the economic uncertainty hanging over most technology purchases, he said.

Solyom said he has no doubts the introduction of smart phones would also eventually segment and “cannibalise” the PDA market in Australia.

“These phones will be branded to consumers with names they know,” he said. “While their functionality isn’t really all that smart compared to a PDA, they feature limited functionality that will prove enough for most consumers. Nevertheless, enterprise users will still want PDA’s.”

For the full story, please see this week's issue of ARN.

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