Smartphones Skyrocket, PDAs Slump
By Eric Lin, Tue Jun 01 22:15:00 GMT 2004

Last month we were resisting calling the PDA dead or even dying. They're not dead yet, but we can hear the little machine that goes "ping."

It's difficult to tell whether the news is actually the worldwide handheld sales figures or how they were presented. On declining PDA sales and growing smartphone sales, Canalys presented the worldwide sales figures strictly by brand, without separating smartphone manufacturers or products from their PDA counterparts. They did, however, separate out some figures in the report itself.

In this new light, the handheld market looks quite healthy, Q1 2004 sales are up 41% over Q1 last year. However when the numbers are split, they paint a different picture. Sales of smartphones increased 115% year over year, while sales of data-centric devices barely grew at all, adding a measely 1%. Of the top 10 handheld manufacturers, three of the four that primarily sell data-centric devices saw sales decline year over year.

Sony saw the worst decline, with sales dropping 45% over Q1 last year, placing it below joint venture Sony Ericsson in the rankings. It came as no shock then, that Sony also announced it will be pulling out of the PDA business everywhere except for Japan. Sony already announced it would cease production of low resolution digital cameras, ceding the market to cameraphones. It seems Sony is setting a trend, leaving low end components and tasks to smartphones while reserving high end abilities for purpose-specific devices.

Sales also declined 10% for PalmOne, despite the fact that its Treo smartphone is enjoying top position in the American smartphone market (but is making a poor showing in both EMEA and Asia/Pacific).

Despite this drop PalmOne still holds the second position in overall sales, behind Nokia. Nokia sold about 75% more smartphones than PalmOne sold handhelds, and saw and 85% increase in smartphone sales over Q1 last year. Nokia holds almost 75% of the smartphone market in EMEA but falls to 25% in North America and Asia/Pacific.

HP, which holds the number three spot overall, is well behind Nokia or PalmOne, but was the only PDA manufacturer that saw a year over year increase in sales.. Spots four through ten, in order, go to: RIM, Fujitsu, Motorola, Sony Ericsson, Sony, Dell and Siemens. Of those onlyu Dell manufactures PDAs.

Despite Sony's decision to continue producing PDAs for Japan, it appears North America is still the last bastion for PDA sales. However their popularity even in North America is waning beyond the trend we've seen over the last few quarters and beyond anything that could be chalked up to post-holiday sales slumps. Despite our caution, it may be time to follow Sony's lead and say our goodbyes to the PDA before they die out.