IDC Sees Bleak Future for the Unconnected PDAFRAMINGHAM, Mass., Aug. 18, 2003 -- As enterprises and consumers continue to heavily scrutinize technology purchases, the evolution of mobile phones will cap market expansion for one of the hottest technology products of the 90's. According to new research from IDC, potential growth for the unconnected PDA market will shift largely to voice-enabled devices. From mobile phones to converged mobile devices, which combine the data capabilities of PDAs with the voice communication capabilities of mobile phones, competing device types will draw buyers away from traditional handheld devices. In 2003, the worldwide handheld device industry will decline by 8.4% to 11.35 million units, its second straight year of decline. While limited growth is expected to return in 2004, dreams of a 20 million unit-a-year market will be replaced by a less than 15 million unit-a-year reality -- a reality that is finding companies like Dell, Handspring, Hewlett-Packard, Palm, and Research-In-Motion looking to converged mobile device production. The converged mobile device market will see its strongest year of growth in 2003 as a number of new Symbian OS-powered devices push worldwide shipment totals beyond 13 million units. "As device aesthetics and functionality improve and end-user prices continue to decline, converged mobile devices are becoming increasingly accessible to the mainstream consumer and are expected to ship in greater numbers than traditional handheld devices for the first time in 2003," says Kevin Burden, manager of IDC's Mobile Device research team. Market growth is expected to remain strong throughout 2007 as a growing percentage of mobile phones adopt high-end operating systems; a compound annual growth rate (CAGR) of nearly 86% is expected through the forecast period. "The killer applications of mobile voice and text communication continue to drive converged mobile device sales upward. As vendor strategies mature, a greater number of voice-centric devices or 'smartphones' are reaching market with significant volume potential as primary-use mobile phones," says Alex Slawsby, research analyst in IDC's Mobile Device research team. "Demand for non-voice enabled handheld devices remains depressed as mixed economic conditions, competition from alternative devices, and limited worldwide appeal impact market expansion." Key Findings * Worldwide units shipment of handheld devices will decrease by 8.4% in 2003. * Rugged pen-based handheld device shipments will approach the volume of rugged keypad-based handheld devices in 2003. * On the strength of improved form factors, platforms, component technology, and lower price points, converged mobile devices have become increasingly accessible to mass mobile phone user. * To achieve legitimate success, it's essential that hardware-centric vendors implement plans to move from hardware revenue dependency to a safer, more balanced strategy of technology licensing, solutions selling, or service provisioning. In this report, Worldwide Smart Handheld Devices Forecast and Analysis, 2003-2007 (IDC #29586), IDC presents year-end 2002 vendor market share data for the worldwide handheld device, vertical application device, and converged handheld device markets, and forecasts all form factors, including splits by operating systems, price band and geographic region through 2007. Examining the market realities of 2002 and 2003, this study offers in-depth analysis on current and future market trends, along with key recommendations and guidance for vendors and enterprises. To purchase this document, call IDC's sales hotline at 508-988-7988 or email sales@idc.com. About IDC IDC is the premier global market intelligence and advisory firm in the information technology and telecommunications industries. We analyze and predict technology trends so that our clients can make strategic, fact-based decisions on IT purchases and business strategy. Over 700 IDC analysts in 50 countries provide local expertise and insights on technology markets. Business executives and IT managers have relied for 40 years on our advice to make decisions that contribute to the success of their organizations. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. Additional information can be found at http://www.idc.com All product and company names may be trademarks or registered trademarks of their respective holders.
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