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Worldwide Market for Handheld Devices

The worldwide market for handheld devices experienced its seventh consecutive quarter of year-over-year decline in the third quarter of 2005. According to IDC, device shipments decreased 16.9 percent year over year and fell 8.8 percent sequentially in 3Q05 to 1.6 million units.

Even as the overall market continues to trend downwards, device manufacturers are steadily pushing forward with new product introductions, software upgrades, and solution deployment, particularly GPS. Given these improvements and the upcoming holiday season, shipments are expected to increase sequentially but decline year over year in the fourth quarter. At the same time, the growth of converged mobile devices, which combine voice and data capabilities in a single form factor, is placing heightened pressure on the handheld market. Those vendors who offer both devices are starting to see shipments of converged mobile devices equal or surpass shipments of handheld devices.

"The combination of tremendous competition from converged mobile devices with waning consumer demand for handhelds is forcing manufacturers to search for new or improved solutions that leverage existing hardware and software capabilities," said Ramon Llamas, research analyst in IDC's Mobile Markets program. "Offering solutions beyond PIM, such as GPS, and reaching out towards first-time users are important steps, but will not necessarily bring about a return to growth. Finding and expanding more solutions to modern mobile consumers and enterprises have become imperatives for the handheld market to drive growth."

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