Palm and Handspring may be facing difficult financial times, but the future of handheld devices looks bright, according to IDC, a global market intelligence and advisory firm.
The company’s new report, “Hand Check: The Smart Handheld Devices Market Forecast and Analysis, 2000-2005,” says worldwide shipments of handhelds increased 88 percent to 13.6 million in 2000, but this year’s increase will be less than half last year’s at 43 percent. Sure, that sounds pretty dismal, but IDC believes this still-strong growth rate is enough to warrant optimism in the market.
“Just six months ago, handheld devices were the bright spot amid dismal expectations for other types of personal technologies such as PCs and mobile handsets,” said Kevin Burden, manager of IDC’s Smart Handheld Devices research program. “However, handheld devices have proved they are not immune to the economic slowdown. Still, no one is saying the handheld industry is circling the drain. In fact, we are quite optimistic about the future of the market.”
In fact, IDC estimates worldwide shipments will increase at a compound annual growth rate of 39 percent from 13.6 million in 2000 to 70.9 million by 2005. The U.S. market represents the largest opportunity for handheld device vendors, accounting for 49 percent of worldwide shipments in 2000. However, U.S. shipments will grow slower than the overall market, and by 2005 U.S. share will decline to 38 percent, according to IDC. Shipments in Asia/Pacific will increase the fastest, earning a 2000-2005 compound annual growth rate of 60 percent.
As for the devices themselves, personal digital assistants (PDAs) are the most popular. IDC estimates they will represent 83 percent of worldwide shipments in 2001.
“Increased diversity of personal companion models across price bands and feature sets, new applications, and new uses are creating appeal for these devices in new market segments,” said Alex Slawsby, analyst for IDC’s Smart Handheld Devices research program. “The evolution of technology in the entire smart handheld market is beginning to enable devices to bend to the usage, needs, and wishes of their users instead of the traditional paradigm of the user bending to the interface and device requirements, and this is increasing acceptance among users.
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