No killer-app means death to handhelds

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Worldwide shipments of handhelds fell significantly in the first quarter as demand in the business and consumer markets cooled despite new devices and lower prices, according to a new report. Shipments were down more than 21 percent, to 2.45m units in the first quarter of 2003 compared with 3.1m units in 2002, according the research firm IDC. The decline was attributed to the poor states of the economy and technology industry as well as to the inability of device makers to develop a product that is considered a must-have for businesses. "When the economy slows, companies look at their priorities. And so far, handhelds aren't there," IDC analyst Alex Slawsby said. "They are considered extraneous and not essential to the daily running of the business. Shipments will rebound but it's a situation where the market is going to have a hard time growing if a killer application isn't found." The handheld market has been sliding in the past few quarters partly as result of one major player, Handspring, shifting its focus from handhelds to a combination organiser and cell phone. But other big names, such as Dell and Toshiba, are slowly filling the void. Palm maintained its No. 1 position in the market with 36 percent, followed by HP, which regained the No. 2 spot from Sony. HP has about 18 percent of the market, and Sony has just more than 16 percent. Dell moved up to the No. 4 spot, with 6.5 percent, from No. 11. Toshiba had 3.6 percent of the market. Handspring was in the No. 7 spot with 2.9 percent. Toshiba managed to increase shipments 306 percent in the first quarter compared with the same period a year ago. HP's progress was due to sales of its $299 (£188) iPaq H1910. The midrange is quickly becoming the sweet spot in the market, where companies have been able to see growth. Dell moved into the top five because of its $199 and $299 Axim devices. Palm stayed on top of the market in large part because of its $99 Zire consumer device, of which the company shipped 850,000 units in the five months of the product's existence. Palm on Wednesday also introduced two new devices: the Zire 71, which is intended for the consumer market, and the Tungsten C, which is aimed at the business market.

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