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Handheld shipments are continuing to decline, as first quarter sales figures reflect poor consumer confidence and tight technology budgets, according to new market research figures from IDC.

Vendors shipped 2.45 million PDAs in the first quarter worldwide, down 21.3 percent from the first quarter of 2002 when 3.16 million units shipped. The first-quarter decline comes on the heels of a full-year decline in handheld shipments. PDAs appear to have been more affected by the prolonged economic downturn of the past few years than PCs, the analysts say.

Vendors Jostle

Palm is still the leader among handheld vendors, shipping 882,000 units in the quarter and earning a 36 percent market share, according to IDC's market research. But Palm's shipments declined sharply from the first quarter of 2002, when it shipped 1.27 million units.

Hewlett-Packard trails in second place with 444,000 units in the quarter, or 18.1 percent market share. If first quarter 2002 shipments from the former Compaq are included with HP's total from that period, shipments declined 6 percent from 473,000 units. HP eliminated its Jornada handheld in favor of Compaq's IPaq handheld, which had been a more popular product than the Jornada, said Alex Slawsby, an analyst with IDC.

Sony increased its shipments to 400,000 units in the first quarter of 2003, or 16.3 percent market share. Sony shipped 250,000 units in last year's first quarter.

Dell vaulted into fourth place ahead of such established PDA vendors like Toshiba, Handspring, and Sharp on strong sales of its two Axim models. Dell shipped 159,000 units in the quarter for a 6.5 percent market share.

This was the first full quarter in which Dell has sold the handhelds, first introduced at Comdex last November. IDC expects shipments of the Axim to continue to grow due to its low price and recent launch, Slawsby said.

Next for PDAs?

IDC defines a handheld device as "a pocket-size device, either pen or keypad-centric, [that is] capable of synchronizing with desktop or laptop computers. Handheld devices are designed to access and manage data including office documents, multimedia, and games. [They] do not include telephony but may include wireless capabilities which enable Internet access and text communication," the Framingham, Massachusetts, research company said.

"The market opportunity is evolving toward high-functionality mobile phones, with voice as the 'killer app,'" Slawsby said.

Pure handhelds without voice capabilities appeal to only a small market of business professionals, while consumers are much more interested in voice technology, especially with the economic uncertainty hanging over most technology purchases, he said.

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