Smartphone boom 'won't hurt handhelds'

Wirelessly connectivity and new features such as satellite location will save the day. In fact, wireless handhelds, which ABI dubs "connected PDAs", will comprise over half the market in 2006, said ABI.

"The emergence of converged devices, such as the connected PDA, may be the latest relief the industry has been seeking," said analyst Kenil Vora in the report.

To date, connected PDAs have not been popular because of limitations in technology. But new devices like the upcoming Treo 600 will help give a much-needed boost to sales of wireless handhelds, said the report.

The Treo 600 handheld from Handspring, soon to be acquired by Palm, features voice and cellular connectivity.

The overall PDA market is expected to grow to $10bn (£6.29bn) by 2008, with a major portion derived from wireless handhelds, said the report.

"ABI research contends that this market will actually experience modest growth of 8 percent CAAG through 2008," said the report.

ABI's research diverges from the view of analysts IDC, which sees stagnation in the PDA market caused by the rising popularity of "converged" mobile phones, which combine organiser functions with the ability to make phone calls.

For 2003, worldwide shipments of PDAs are expected to decline 8.4 percent, to 11.35 million units from 12.4 million units last year. Growth and unit volumes of handhelds have reached their ceiling, according to IDC.

ABI defines connected PDAs as converged devices with a PDA-based operating system, like that of Palm OS or Microsoft's Pocket PC. Smartphones are more like standard cellular handsets and employ a system such as Symbian or the Microsoft's Smartphone.

In addition to getting a boost from sales of wireless handhelds, PDA sales will be boosted by innovations such as telematics, satellite location, barcode scanning, RFID (radio frequency ID) tracking and digital photography, according to ABI.

Smartphones will continue to represent only a small portion of the mobile phone market, said Vora.