Handheld computer shipments dip

By Franklin Paul

NEW YORK: Global shipments of handheld computers fell once again in the second quarter, as demand for the pocket-sized personal organizers continued to shrink, as did Palm Inc.'s dominant hold on the market, according to a recent study.

Research group International Data Corporation (IDC) on Thursday said second quarter shipments fell to 2.6 million, down 10 percent from one year ago, and off 17 percent from the first quarter.

Palm, which makes both the devices and the operating system software that drives them, once again dominated the market, but its grip loosened somewhat as competitors gained share.

Palm shipped 846,000 of its branded devices, IDC estimated, down from 1.3 million in the first quarter and 890,000 in the year-ago period. Its worldwide share fell to 32.4 percent, from 40.6 percent in the first quarter, but was slightly better than the 31 percent share it claimed in the second quarter of 2001.

IDC analyst Kevin Burden said demand for the devices has slowed, as consumers, faced with a troubled economy, think twice about spending up to $500 on a device that primarily manages appointments and keep track of phone numbers and memos.

What's more, many of those who already own handhelds have not been persuaded that they should replace their devices.

"I think we are going to see demand go down until people are comfortable spending their money and devices come out that convinces people to upgrade," Burden said.

In the US, the biggest market for handhelds, shipments were 1.3 million, off 19 percent from the first quarter, but up 8 percent from the second quarter of 2001. Palm held a 42 percent stake of the US market, according to IDC.

Shipments had also fallen in the first quarter, as demand weakened after the traditionally strong fourth quarter, which is boosted by holiday sales.

WAITING TO UPGRADE?

Experts have suggested that Palm buyers are awaiting new devices with faster processors and more powerful software due later this year. The new processors and Palm operating software will bring most of the software applications to Palm-based devices that are now only available on Microsoft-based devices.

Devices that run on Microsoft Corp.'s Pocket PC operating system got a boost in the rankings after merger of Compaq and Hewlett-Packard closed during the quarter. The deal paired the makers of the iPaq and Jordana lines of PDAs, respectively.

The new company, Hewlett-Packard Co is now the No. 2 maker of handhelds, having shipped 485,000 units in the period, or 19 percent of the total.

Sony Corporation climbed to No. 3 with about a 10 percent stake. Its 250,000 units shipped represent a 233 percent rise from the 75,000 it shipped in the same quarter one year ago.

Handspring Inc., once the second biggest maker of handheld computers, slipped to fourth place, with 171,000 units shipped, and a 6.5 percent ranking. Handspring this year has shifted its focus away from digital organizers, and has released a line of so-called "communicators" -- a combined mobile phone and PDA.

Only shipments of certain of Handspring's models were included in the study, IDC said.

Shipments of devices made by Research In Motion Ltd. ranked 8th on the global study, with 87,000 units shipped, or about 3 percent of the market.