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Fall and Fall of the Pocket-Sized PC Market

The second quarter of 2006 saw the worldwide handheld devices market experience its tenth consecutive quarter of year-over-year decline. According to IDC's Worldwide Handheld QView, vendors shipped a total of 1.4 million devices, a 26.3 percent decrease from the same quarter one year ago.

For the first half of the year, vendors shipped a total of 2.9 million units, down 21.4 percent from the 3.7 million units shipped during the first half of 2005.

"The past ten quarters have provided a combination of factors that have led to this milestone: the exit of vendors from the handheld market, the shift of vendor focus from handheld devices to converged mobile devices (i.e. smartphones), and the increasing popularity of converged mobile devices overall," said Ramon Llamas, research analyst with IDC's Mobile Markets Team. "Looking ahead, we expect additional quarters of decline and a flattening out of shipment activity before a return to growth. In order to do that, vendors must discover more market segments, relevant applications, and improved usability beyond personal information management. The inclusion of Bluetooth, Wi-Fi, and GPS have kept handheld devices relevant, particularly for core users. However, more applications must be deployed to reach more users and eventually bring about a stabilizing effect to shipment activity."

IDC Research Definitions:

- 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.

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