The worldwide handheld device market posted its fifteenth consecutive quarter of decline in shipments, signaling either vendor intent to scale back production or exit from market entirely, or both. According to IDC's Worldwide Handheld QView, vendors shipped 728,894 handheld devices in 3Q07, approximately 1.5% more than the previous quarter but 39.3% less from the same quarter a year ago.

"The handheld device market has been under constant pressure, with mobile phones and converged mobile devices appropriating many of the handheld's salient attributes," says Ramon T. Llamas, research analyst with IDC's Mobile Device Technology and Trends team. "Handheld product portfolios have suffered as vendors have reallocated their production resources."

"However, the handheld device market may be down, but is not necessarily out. The handheld still has a loyal, if shrinking, following in developed economies, especially among enterprise users. In emerging markets, the appeal of the handheld devices seems anchored in the fact that, in the absence of a monthly service plan, it has a lower total cost of ownership compared to mobile phones and/or the converged mobile device."

Top Five Handheld Device Vendors

Palm remained the clear leader in the handheld market even though it has not launched a new model for over two years. However, over the same period, the company has released nearly a dozen new Treo converged mobile devices. After having retired the Life Drive, Palm is relying on its Z22, TX, and Tungsten E2 handheld devices to represent the company.

HP retained the No. 2 position during the quarter, still trailing Palm but far outpacing any of the remaining vendors. In September, HP announced plans for several new devices including two handheld devices - the 111 Classic Handheld and the 211 Enterprise Handheld - as well as the iPAQ 610 Business Navigator, a converged mobile device.

Mio has standardized GPS capability on all of its handheld devices, and by leading with that value proposition, the company has experienced continued growth. Recently Mio announced two new additions to its portfolio, the P360 and the P560. The P560 boasts WiFi as one of its key features.

Fujitsu-Siemens climbed back into the top five rankings after a one quarter hiatus, and stayed far ahead of the remaining vendors to claim the No. 4 spot as its own. Helping to drive volumes were its C Series and N Series devices shipped into EMEA, and recently the company has begun to offer a competing converged mobile device with its Pocket LOOX T Series device.

Sharp narrowly stayed ahead of a crowded group of other vendors to take the number five spot during the quarter, and suffered the largest year-on-year decline in the group. All of its shipments were recorded in Japan, and they accounted for nearly two-thirds of all handheld devices shipped to that country. While Sharp's business has floundered, its success in the mobile phone and converged mobile device segments has propelled it to the No. 1 position in Japan.