Potential growth for the unconnected PDA market will shift to smartphone devices.

As enterprises and consumers continue to heavily scrutinize technology purchases, the evolution of mobile phones will cap market expansion for one of the hottest technology products of the 90’s. According to new research from IDC, potential growth for the unconnected PDA market will shift largely to voice-enabled devices.

From mobile phones to converged mobile devices, which combine the data capabilities of PDAs with the voice communication capabilities of mobile phones, competing device types will draw buyers away from traditional handheld devices. In 2003, the worldwide handheld device industry will decline by 8.4% to 11.35 million units, its second straight year of decline. While limited growth is expected to return in 2004, dreams of a 20 million unit-a-year market will be replaced by a less than 15 million unit-a-year reality – a reality that is finding companies like Dell, Handspring, Hewlett-Packard, Palm, and Research-In-Motion looking to converged mobile device production.

The converged mobile device market will see its strongest year of growth in 2003 as a number of new Symbian OS-powered devices push worldwide shipment totals beyond 13 million units. "As device aesthetics and functionality improve and end-user prices continue to decline, converged mobile devices are becoming increasingly accessible to the mainstream consumer and are expected to ship in greater numbers than traditional handheld devices for the first time in 2003," says Kevin Burden, manager of IDC's Mobile Device research team. Market growth is expected to remain strong throughout 2007 as a growing percentage of mobile phones adopt high-end operating systems; a compound annual growth rate (CAGR) of nearly 86% is expected through the forecast period.

"The killer applications of mobile voice and text communication continue to drive converged mobile device sales upward. As vendor strategies mature, a greater number of voice-centric devices or 'smartphones' are reaching market with significant volume potential as primary-use mobile phones." says Alex Slawsby, research analyst in IDC's Mobile Device research team. "Demand for non-voice enabled handheld devices remains depressed as mixed economic conditions, competition from alternative devices, and limited worldwide appeal impact market expansion."