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Handheld shipments dip in first quarter

Shipments of handhelds declined in the first quarter after two quarters of growth. An especially strong fourth quarter was partly to blame, according to a report.

For the handheld computer industry, the post-holiday blues were a little worse than usual.

After two consecutive quarters of growth, worldwide shipments of handhelds declined in the first quarter. The expected slow period saw a bigger dip than usual, with increasingly significant entry-level buyers staying out of stores, according to a report.

Research firm IDC said Tuesday in its quarterly report on the handheld market that shipments fell 11.7 percent compared with the same period a year ago, to 2.2 million units. The first quarter is traditionally a slow selling period for the market, but this year it was a victim of strong fourth-quarter sales. Shipments dropped 33.1 percent from the fourth quarter to the first, according to the report.

"The market in the United States is moving toward the low end, and many of the buyers looking for low-priced devices made their purchases around the holidays," said IDC analyst Alex Slawsby. "The overall market will return to growth but, minimally, the U.S. market is expected to continue to decline, with growth coming from Western Europe and the Asia-Pacific region."

Slawsby added that sales of high-end devices, $300 and up, are not growing in the United States. He pointed to PalmOne, which recently announced that it shipped 3 million Zire devices in 18 months but overall volumes remained flat. Part of the reason for little growth is also a shortage in supply of the PalmOne's high-end combination cell phone and organizer, the Treo 600. However, Hewlett-Packard and Dell also experienced little growth in high-end segments, Slawsby reported.

The IDC report also pointed to manufacturers trimming their lines to prepare for spring product launches. PalmOne is expected to announce two new Zire devices, the $299 Zire 72 and the $149 Zire 31, on Wednesday.

PalmOne remained the market leader, though its share dipped from 39.4 percent to 36.1 percent. The company shipped 810,183 units. HP shipped 577,615 units, giving it the second spot, with 25.7 percent of the market. HP experienced the strongest year-to-year growth in shipments among the market leaders, logging a 24.8 percent increase. Sony Electronics' share dipped to 9.3 percent, followed by Dell with 7 percent and Toshiba with 2.2 percent.