Europe handheld PC market shrinks in Q2

LONDON: Shipments of handheld computers fell for the fourth consecutive quarter in Western Europe as computer makers struggled to make the devices easier to use and more attractive to consumers, two new surveys found on Tuesday.

Two leading market research groups for the computer industry, Gartner Dataquest and IDC, found that between 450,000 and 463,000 units were shipped to the region in the second quarter. This is some 18 to 21 percent fewer than the same quarter a year ago. The market for personal digital assistants (PDAs) fails to live up to expectations, Gartner Dataquest said.

"These are still tiny numbers. Many people have talked about the big potential of PDAs, but it hasn't yet materialized," market research analyst Roberta Cozza said. With two different software standards and hefty price tags equal to desktop computers, the industry first needs to improve its products before it should expect strong growth, Cozza said.

By comparison, the global mobile phone industry shipped around 93.8 million units in the first quarter of this year. European PDA shipments, around a quarter of total global shipments, have been falling in line with declines in other key geographic areas such as the United States and Japan.

Top Vendors

Market shares of the top two vendors in Western Europe, U.S.-based Palm and Hewlett-Packard, which includes Compaq's iPaq, were more or less stable around 30 percent.

Palm buyers are awaiting new devices with faster processors and more powerful software due later this year. The new processors and Palm operating software, which is developed and sold separately from the hardware division and which will be spun off next month, will bring most of the software applications to Palm-based devices that are now only available on Microsoft-based devices. Japan's Sony stormed the charts for the quarter with a 6% percent market share with its products based on Palm software.

It brings Sony close to the other major Palm software user, Handspring of the U.S., according to IDC. Gartner said Handspring had lost some market share as it focused on its Treo line of products, which integrate a mobile phone with a PDA, and stopped putting emphasis on its lower-priced Visor PDAs. Hewlett-Packard, which uses Microsoft Pocket PC software, needs mid-range products in addition to its Compaq iPaq if it wants to hold on to its narrow lead over Palm, Gartner said.

Gartner's Cozza still forecasts 2.3 million units to be shipped this year, up from 2.1 million, but only if Palm and Microsoft manage to bring out successful new products in the fourth quarter. Andy Brown, research manager for mobile computing at IDC, said the handheld device market needed to make clear why people should buy a PDA or upgrade to a new model.

"The high cost of integrating new devices into organizations and the justification of the 'benefits of ownership'" are also slowing the market, he added.

© Reuters