Worldwide Handheld Market Experiences Third Straight Year of Decline, According to IDC

FRAMINGHAM, MA – February 2, 2005 – The worldwide market for handheld devices experienced its fourth successive quarter of year-over-year decline in the fourth quarter of 2004. According to IDC's Worldwide Handheld QView, device shipments increased 37.4% sequentially but fell 18.7% year-over-year in 4Q04 to 2.8 million units. For the full year 2004, worldwide handheld device shipments reached 9.2 million units, a decrease of 13% over 2003's shipments of 10.6 million units.

2004 marks the first time since 1999 that worldwide handheld device shipments have slipped to under 10 million units and the third straight year of decline since the market's peak in 2001. This distinction, underscored by the departures during the year of top vendors Sony and Toshiba, further emphasizes the increasing competition and search for relevance that handheld device vendors are facing in today's marketplace. While vendors have seen recent successes with bundled and integrated GPS receivers, the lack of other compelling solutions beyond PIM and GPS continues to limit the vendors' ability to expand into new market segments.

"Despite a rise in quarterly shipments due to holiday seasonality and consumer uptake of bundled and integrated GPS receivers, increasingly saturated markets and stiff competition from converged mobile devices drove the handheld device market to its third straight year of decline," said David Linsalata, analyst in IDC's Mobile Devices program. "This drop stresses the urgent need for vendors to evolve their devices beyond personal information management in order to return the market to a growth path."

Vendor Highlights:

— palmOne – palmOne continued to lead the handheld device market, posting an impressive 59.5% sequential gain in shipments. However, even the market leader continued to feel pressure from the slumping market, seen in the company's 11.1% year-over-year decrease in shipments.

— Hewlett-Packard – Despite a quarterly shipment gain of 25%, Hewlett-Packard lost 2.7% market share as a result of palmOne's strong shipment increase. The company also suffered the effects of the shrinking market, reflected in a 10.7% year-over-year drop in shipments.

— Dell – Dell, less affected by seasonality due to its direct sales model and enterprise focus, still experienced a loss of 2.2% market share during the fourth quarter. However, the company exhibited a steady 4.4% sequential growth and a strong 22% year-over-year increase thanks to strong shipments from its x30 and new x50 models.

— Medion – Continuing the company's past trend of strong shipments every other quarter, Medion regained its place in the Top 5 with a sequential rise in shipments of 666.7%. Shipment growth came mainly from a major GPS navigation bundle push in Europe.

— Mio – Mio, MiTAC's branded handheld device line, continued to see strong uptake of its GPS devices during the past quarter, giving the company a 61.4% sequential increase and a 444.3% year-over-year jump, and ensuring a second consecutive quarter in the top 5 vendors.

Top 5 Vendors, Worldwide Handheld Device Shipments and Market Share,

4Q 2004 (Preliminary)

Rank Vendor 3Q 2004 Shipments 4Q 2004 Shipments 4Q 2004 Market Share

1 palmOne 736,481 1,174,371 42.0%

2 Hewlett-Packard 615,515 769,170 27.5%

3 Dell 188,200 196,572 7.0%

4 Medion 15,000 115,000 4.1%

5 Mio 54,172 87,407 3.1%

Other 426,425 454,347 16.2%

Total 2,035,793 2,796,867 100.0%

Source: IDC, February 2, 2005

Top 5 Vendors, Worldwide Handheld Device Shipments and Market Share,

2004 (Preliminary)

Rank Vendor 2003 Shipments 2004 Shipments 2004 Market Share

1 palmOne 4,035,125 3,645,399 39.6%

2 Hewlett-Packard 2,286,052 2,492,539 27.1%

3 Dell 584,511 695,171 7.6%

4 Sony 1,402,044 418,832 4.6%

5 Medion 198,505 234,325 2.5%

Other 2,069,613 1,716,895 18.7%

Total 10,575,850 9,203,161 100.0%

Source: IDC, February 2, 2005


— Vendor shipments are branded shipments and exclude OEM sales for all vendors.

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

— Handheld devices do not include telephony but may include wireless capabilities that enable Internet access and text communication. These devices feature evolved operating systems or applications environments such as the Palm OS, Windows Mobile Pocket PC, Linux, or other proprietary platforms with the ability to download, run applications, and store user data beyond their required PIM capabilities.

IDC's Worldwide Handheld QView provides device vendors, software developers, service providers, and component suppliers with timely and accurate information on the worldwide handheld market. The program provides quarterly measurements of worldwide unit shipments and vendor market shares.

For more information about IDC's Worldwide Handheld QView program, please contact Jonathan Guloyan at 508-935-4296 or

About IDC

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