Digital assistants continue to lose ground

updated 6:10 p.m. ET Oct. 27, 2004

FRAMINGHAM, Mass. - Shipments of personal digital assistants declined for the third consecutive quarter as large vendors continued ceding the depressed market to smaller electronics makers, the research firm IDC said Wednesday.

Worldwide shipments of handheld PDAs lacking telephone capabilities decreased to 2.1 million units in the third quarter ending Sept. 30 -- an 8.7 percent drop compared with the same quarter a year ago and a 4.6 percent decline from this year's second quarter, Framingham-based IDC said.

Shipments decreased 2 percent in the second quarter and nearly 12 percent in the first quarter. Shipments were off a total 18 percent in 2003, despite a 3 percent increase in that year's fourth quarter.

So-called smart phones, which combine organizer functions with voice capabilities and more, have absorbed some of the PDA market.

As a result, major PDA vendors such as Sony Corp. and Toshiba Corp. have nearly completed their exits from the market as smaller electronics makers have moved in and quickly gained market shares despite dropping profit margins, IDC said.

"In the face of intense competition from converged mobile devices capable of performing basic personal information management tasks, the worldwide handheld device market continues to struggle to evolve beyond its primary role as a PIM (personal information management) device," said David Linsalata, an IDC analyst.

In the third quarter, PalmOne Inc., the top PDA seller, commanded nearly 34.7 percent of the market, down from a 42 percent share the previous quarter.

Hewlett-Packard Co. held the No. 2 slot last quarter with 30.6 percent, followed by Dell Inc. at 8.9 percent; MiTac International Corp., 3.2 percent; and Sony, 2.1 percent.

Sony, which in June announced its plans to exit the conventional PDA business, except in Japan, had held the No. 3 position in the second quarter with a 7.8 percent share.

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