Shipments of pocket-sized computers declined 18% in 2003, despite moderate gains in Q4, according to industry research. For the full year, the total handheld market decreased to 10.4 mil units, off 17.9% from the previous year’s shipments of 12.6 mil units, research firm IDC said in its Worldwide Handheld report. In the fourth quarter, shipments rose to 3.4 mil units, up 3.2% from the previous year, and up 52.7% from Q3.
Nokia, Sony Ericsson, Motorola and Orange manage to ship over 2 million smartphones between them, but the handheld market, at times dismissed by some as being almost saturated, managed to post a record quarter, with well over 1 million devices shipped. Highlights include HP becoming the clear leader in handheld segment, with 33% share of shipments in Q4 2003; Palm chalking up a second place with a 25% share as shipments fall 19% compared to year-ago quarter; the last quarter of 2003 becoming the first in EMEA where handhelds broke the 1 million unit barrier; and Nokia – unsurprisingly – retained smartphone leadership with 78%.
Western European PDA shipments were up 38% in the fourth quarter and up 28% during the whole of 2003, the first full year of growth since 2000. According to the latest numbers from IDC, PDA (personal digital assistant) shipments in Western Europe hit 2.6 mil last year, thanks in part to 958,000 unit shipments in Q4 2003. In 2002, just under 2 mil handheld computers/PDAs were shipped, with 693,000 leaving manufactures’ storehouses in Q4 of that year. Low prices and new bundled packages drove the healthy growth, IDC said.
In fact, sales of Microsoft’s Pocket PC operating system outpaced Palm sales by a wide margin. For the full year, 1.423 mil Pocket PC-based PDAs were shipped in Europe, compared to 1.039 mil Palm-based devices. In the last three months of the year, the Microsoft operating system was in 60% of PDAs shipped in Western Europe, compared to about 32% a year ago. Conversely, Palm software was in about 40% of Western Europe’s new PDAs in Q4, compared to about 54% a year earlier. Pocket PC’s strength helped HP become the top hardware vendor, with 37% market share, compared to Palm’s 30% market share in the final months of last year. In Q4 2002, HP had a small 20% share versus Palm’s 51% share. For the full 2003 year, the two companies finished neck and neck, with Palm marginally ahead of HP with a 32.3% market share.
Global PDA shipments down 0.2%. Asia Pacific down 40%. HP increased its shipments by 98.5% in Q3. PalmOne increased its market share slightly in Q3, from 32.1% to 34.2%, compared with the same period last year. HP’s share jumped from 11.6% to 23.1% , while Sony’s dipped from 13.3% to 10.1%. Dell was just ahead of Research In Motion, with 5.5% and 4.9% respectively.
Research firm Gartner predicts sales of smartphones worldwide to increase 140% to 20.7 million units next year as demand for PDAs flattens. According to Gartner, the Palm operating system will hang on to a slim lead in the PDA market next year amid a battle royal over smartphone sales between the alternative platforms, Microsoft Windows Mobile, Symbian, Palm and Linux.
According to the firm’s report on handheld shipments, the number of PDAs and handheld computers that were shipped in the third quarter of 2003 rose by 1.1% year-on-year. On a sequential basis, unit shipments increased by 9.4% to 2.37 million units. Palm maintained its top position in the market, while Hewlett-Packard rose sharply, distancing itself from number three Sony and moving closer to the top.
“Unless holiday season demand proves particularly positive, the handheld device market will decline more steeply in 2003 than in 2002 as it returns to 2000 levels,” said Sealfon.
According to IDC’s figures, Palm’s market share declined from 41.8% in the second quarter to 35.6% this quarter due to a slower than expected end-of-summer sales of current models. IDC said that despite a slight increase in sales, Sony’s market share declined from 11.9% in Q2 to 11.5 percent in the third quarter. This was largely due to increasing shipments from rival Hewlett-Packard.
“We went form zero to 35% market share in the span of four years,” said Intel senior vice president Ron Smith who attributed much of the company’s legacy technology to Intel’s 1999 acquisition of DSP Communications.
The market for stand-alone PDAs has been dropping steadily for several quarters, as consumers and businesses hold off on purchasing anything other than essential technology items, IDC said. In 2003, worldwide handheld shipments will decline 8.4% to 11.35 million units.
However, shipments of converged devices, which combine voice and data communications, will increase to about 13 million units by the end of 2003, IDC said. Nokia Corp. dominates the market for converged devices, shipping 1.2 million units in the second quarter, representing 61% of the market, according to IDC.