The worldwide market for handheld devices has experienced its third straight year of decline in 2004, says IDC, blaming competition from converged devices such as smart phones.

"Consumers don't see the need to invest $600 in a handheld device if a smart phone can do the same basic tasks," said David Linsalata, an analyst in IDC's Mobile Devices program.

During 2004, 9.2 million units were shipped - a decrease of 13 percent on the previous year, and the first time sales have slipped under 10 million for five years. "The vendors haven't been able to break away from the personal information manager-market (PIM)," Linsalata said. "The handheld computer needs to evolve beyond its core functionality."

One such example is GPS, which most vendors offer today. However, Linsalata couldn't point out any new features or killer apps that were going to push the market back up to the 2001 peak. "The handheld computer has certain adequate advantages such as larger and brighter screens, bigger batteries and attached keyboards," he reached.

In 2004, two top vendors, Toshiba and Sony left all but the Japanese handheld market, although Linsata doesn't think that indicates a trend. "I haven't heard anything from the top five vendors. The handhelds do complement their entire enterprise, offering a mobile solution."

The conversion of handheld computers into smart phones and mobile phones being equipped with PIM features, sometimes makes it difficult to define a handheld device. The devices included in the IDC survey do not include telephony, but may include wireless capabilities that enable Internet access and text communication.

Even though the year-over-year market for handheld devices has declined in the last three years, shipments increased 37.4 percent the last quarter of 2004 probably due to the holiday season.

Top vendors for 2004

  1. PalmOne (39.6 per cent marketshare)
  2. HP (27.1 per cent)
  3. Dell (7.6 per cent)
  4. Sony (4.6 percent)
  5. Medion (2.5 per cent)