Worldwide Combined PDA and Smartphone Shipments Market

Worldwide shipments of PDAs and smartphones combined totaled 42.1 million units in the first half of 2006,a 57 percent increase from the same period last year, according to Gartner,
Inc. Smartphone shipments bolstered the market growing 75.5 percent to reach 34.7 million units, more than four times the size of the PDA market. PDA shipments increased by 5.7 percent totaling 7.4 million units.

“Japan overtook Europe, Middle East and Africa (EMEA) to become the largest market for smartphones in the first half of 2006," said Roberta Cozza, principal research analyst in Gartner’s computing platforms worldwide group. “Japan now accounts for 33 percent of the worldwide smartphone market. North America was the only region where sales of PDAs
continued to outsell smartphones. Consumer taste and fashion, advances in personal information manager (PIM) software and messaging, and rapidly declining prices all combined to drive the strong growth in smartphone sales. On the other hand, consumer demand for PDAs is dwindling,especially with no new models from Palm in 2006."

Market Overview

In Japan, smartphone shipments grew 153 percent in the first half of the year, despite a decline of 22 percent in the second quarter of 2006. Japanese smartphone shipments totaled 11.6 million units in the first half of 2006. This allowed Japan to capture the global lead from EMEA, which grew 26.3 percent. EMEA accounted for 30 percent of the worldwide smartphone market, down from 42 percent in the first half of 2005.

The Asia Pacific region overall remained very strong during the first half of 2006, accounting for 29 percent of the worldwide market. Shipments in North America grew 104 percent in the first half of 2006, however, its share of the global smartphone market remained fairly stable at 6.3 percent.

North America remained the only region where PDAs continue to outsell smartphones. In the first half of 2006, the region accounted for 45 percent of worldwide PDA shipments, slightly up from the same period in 2005. In the first half of 2006, the EMEA and the North America regions accounted for 85 percent of the PDA market.

Vendor Perspective

Nokia accounted for 42 percent of the combined PDA and smartphone market in the first half of 2006 and commanded half of the global smartphone market. "The company’s strategic focus remains on the consumer smartphone segment, so more favourable seasonal trends in the second half of the year and the introduction of new models should help Nokia achieve higher
shipments of its basic smartphones," said Ms Cozza.

Motorola accounted for 5.3 percent in the combined PDA and smartphone market. Motorola’ smartphone shipments grew 103.5 percent in the first half of 2006, which represented the highest year on year growth among the top 5 vendors. This performance was driven by the success of Motorola’s Linux-based devices in China. However, Motorola is not making significant progress with its Microsoft and Symbian-based smartphones and shipments of the Motorola Q have been hampered by the minimum $80 monthly service plan offered by Verizon.

In the first half of 2006, RIM accounted for 6.5 percent of the combined PDA and smartphone market, with shipments up 60 percent year on year. RIM smartphone shipments represent 36 percent of all BlackBerry mobile devices, up from 9 percent in the same period last year. The company retained its leadership position in the global PDA market in the first half of 2006, with an increase of 13.5 percent from the same period last year.“ As mobile email expands beyond the executive segment, RIM is responding with a new hardware strategy in the form of their new Pearl device to tackle prosumer (professional consumer) and consumer markets
for wireless email," Mr. Kort, principal analyst in Gartner’s computing platform worldwide group.

In the first half of 2006, Palm accounted for 5 percent of the combined PDA and smartphone market, down from 8 percent in the first half of 2005. Palm saw a decrease of 26 percent in the first half of 2006. “Palm’s PDA business continues to decline as the company shifted its focus on sales of its Treo smartphones, which accounted for 57 percent of Palm’s mobile device shipments in the first half of 2006," Mr. Kort added.

2006 Forecast

According to Gartner’s latest forecast, smartphone shipments will increase by 66 percent to reach 81 million units in 2006. “The stronger consumer demand which generally characterises the second half of the year will allow higher volume growth in smartphones. Symbian licensees will continue to drive the market and we can expect new product introductions to focus on advanced features, fashion and rich multimedia functionalities which will fuel demand," Ms Cozza added. “Going forward,players in the smartphone segment will need to overcome the challenge of selling the benefits of smartphones over less expensive enhanced phones
if they want to increase overall volumes further. It will be crucial for them to focus on promoting content, applications and services that take full advantage of smartphone capabilities," Ms Cozza concluded.

In 2006, Gartner expects the PDA market to increase by 6.3 percent to 16 million units. The market will continue to be driven by broader availability of cellular-enabled PDAs from wireless carriers. Gartner estimates that 53 percent of all PDAs shipped in the first half of 2006
featured integrated cellular capability, up from 46 percent during the same period in 2005. “The share of PDAs purchased by enterprises will continue to increase; it accounted for 49 percent of all PDA shipments in the second quarter of 2006 and Gartner expects that the enterprise market will account for 52 percent of all PDA shipments in 2006," said Todd Kort.

Additional information is available in the Gartner’s PDA and Smartphone quarterly statistics programme. The summary of the research can be found at:gartner