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PDAs Keep Losing Ground to Smart Phones

Posted on: Wednesday, 11 May 2005, 15:00 CDT

FRAMINGHAM, Mass. -- Shipments of handheld computers declined for the fifth straight quarter amid growth of so-called smart phones and other devices combining organizer functions with cell phone capabilities, the research firm IDC said Wednesday.

Worldwide shipments of personal digital assistants, or PDAs - which lack telephone capabilities - decreased to 1.9 million units in the January-March period. That's a 12.1 percent decline compared with last year's first quarter, and a 30.6 percent drop from last year's fourth quarter, Framingham-based IDC said.

In contrast, shipments of so-called converged mobile devices combining cell phone, organizer and other functions more than doubled year-over-year for the third straight quarter. Shipments of those devices rose nearly 135 percent in the first quarter compared with a year ago to 8.4 million units, despite a 3.6 percent decline compared with the fourth quarter.

"The handheld device market is facing stiff competition in saturated markets, while the converged mobile device market offers opportunities for new growth to handheld device and mobile phone vendors alike," said David Linsalata, an IDC analyst.

Handhelds were first popularized by the original PalmPilot in 1996. But major personal digitial assistant vendors such as Sony Corp. and Toshiba Corp. have recently exited the market because of the switch to converged devices.

In the first quarter, palmOne Inc., the top PDA seller, commanded nearly 33 percent of the handheld market, down from a nearly 38 percent share in the same quarter a year ago. The shrinking market caused palmOne's handheld sales to decline nearly 24 percent.

Hewlett-Packard Co. held the No. 2 slot last quarter with 26 percent, followed by Dell Inc. at 11.4 percent. Acer had 6.5 percent and Medion was at 4 percent.

The first-quarter leader in sales of converged devices was Nokia, with a nearly 65 percent share, up from 50 percent a year ago. The No. 2 vendor was Research in Motion, the maker of Blackberry devices, at 9.2 percent, followed by Fujitsu at 8.5 percent. PalmOne had 4.6 percent and Sony Ericsson had 2.5 percent.

Source: Associated Press/AP Online

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