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Daily News

Worldwide Hand-held Device Shipments Decline in Q1
Apr 28, 2004
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The worldwide market for hand-held devices* declined in the first quarter of 2004 due to seasonally sluggish demand and vendor re-focusing, according to market research firm IDC. Device shipments decreased 11.7 percent year-on-year in the first quarter of 2004 and dropped sequentially 33.1 percent to 2.2 million units, the firm reported.

While vendor commitment to entry-level devices at lower price points has helped to grow the hand-held user base, IDC reported that many would-be hand-held purchasers obtained their devices during the holiday shopping season in the fourth quarter of last year. As a result, despite growth in the European market, the seasonal slump hit vendors particularly hard during the first quarter of this year. The market was also strongly impacted by a number of vendors focusing on trimming down their product offerings and clearing their channels in preparation for spring product launches, IDC said.

"Despite increasingly powerful hand-held devices reaching market, the consumer uptake of entry-level devices available from nearly every vendor calls into question the upgrade path and value posed by the high-end devices," said David Linsalata, analyst in IDC's Mobile Devices program. "If entry-level devices prove to be the most successful products adopted by consumers, the long-term impact could be acceleration away from hardware differentiation and a further loss of value in the hand-held industry."

Mr. Linsalata also said that hand-held device vendors must continue their search for consumer and enterprise solutions for their products that utilize the range of capabilities contained in a hand-held device.

Vendor Highlights

  • palmOne - Hit particularly hard by the seasonality of the hand-held market, palmOne posted a sequential decline of 38.7 percent and a corresponding decrease in market share from 39.4 percent to 36.1 percent. However, palmOne will announce two Zire hand-helds this quarter and, given the fact that the Zire family has surpassed 3 million units in fewer than 18 months, palmOne's shipments are expected to increase in the near future.
  • Hewlett Packard (HP) - Despite the declining hand-held market and a 32.9 percent sequential drop, HP posted the strongest year-over-year increase among the top 5 vendors with a rise of 24.8 percent. This increase, based on the strength of an array of devices hitting the entire spectrum of price points, enabled HP to maintain its market share position of 25.7 percent.
  • Sony - Caught in the middle of a strategy shift to a streamlined set of products and a focus on improved PIM and other core hand-held applications, Sony's market share dropped to single digits on a sequential drop of 57.2 percent and year-over-year drop of 49.6 percent.
  • Dell - Riding the benefit of a fiscal year-end sales push in January as well as Dell's direct sales model, Dell experienced a 1.1 percent sequential decline in shipments, the lowest drop among the top 5 vendors. Seasonality did take its toll, however, as the company only increased 2.2 percent year-over-year, bringing its market share up 4.7 percent to 7 percent.
  • Toshiba - Despite a relatively lackluster first quarter with a year-over-year shipment decrease of 34.1 percent and a sequential decrease of 48.4 percent, Toshiba reentered the top 5 vendor list this quarter. Toshiba, a constant member of the top 5 vendors since Q302, was knocked out of the top 5 vendor list last quarter by newcomer Medion's strong sales. Medion did not, however, repeat last quarter's performance.

    *Hand-held devices are pocket-sized, either pen or keypad-centric, and are capable of synchronizing with desktop or laptop computers. Hand-held devices are designed to access and manage data including office documents, multimedia, and games.

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