Converged devices reach almost 2 million units in 1Q05, says IDC
According to the latest market data released by IDC, the European mobile devices market (including PDAs and smart phones) grew by 55% in the opening quarter of 2005, with shipments reaching 2.5 million units compared to 1.6 million units in the corresponding quarter of 2004. Although converged devices (voice-enabled PDAs and smart phones) remained the primary driver of growth, increasing their overall share of the market to 73%, standalone handhelds continued to witness healthy demand in both the consumer and enterprise segments, refuting fears of a market slowdown.
While anticipated seasonality impacted the market due to heavy consumer spending in the final quarter of 2004, the steady increase in enterprise adoption of devices, consumer contract renewals of converged devices, and the sustained popularity of handheld GPS solutions ensured buoyant market
growth. GPS in particular continued to drive consumer demand for standalone handhelds in 4Q, with attachment rates remaining at between 30% and 35%.
“Continued innovation by vendors with regard to channel strategy, emphasis on comparative pricing with dedicated systems, and declining ASPs of both GPS software and the handheld unit are serving to sustain demand,” said Geoff Blaber, research analyst, European Mobile Devices. “The introduction of new devices featuring integrated GPS antennas from a number of vendors such as Garmin, Mio, and Navman, illustrates vendors’ growing commitment to this space.”
In the standalone handheld segment, there was further erosion of market share for established vendors HP and palmOne in 1Q, with negative growth of 10% and 33%, respectively, in response to further growth for white box vendors. Acer in particular witnessed phenomenal year-on-year growth to
take third place overall, with a market share of 15%; its n35 handheld with integrated GPS proved successful across Europe, particularly in Germany and Spain. Similarly, Medion maintained its progress from 2004, increasing its market share to 11% and fourth position overall, while shipments for vendors Asus, Mio, and Yakumo all approached the 40,000 units mark, serving to heighten market price sensitivity.
Despite healthy growth for handhelds, converged devices remained the primary driver of overall market growth. Device releases from Nokia in 1Q such as the 3230 in the series 60 category as well as the new 9300 Series 80 Communicator drove growth of 63%, with demand for new devices aiding
shipments.
“The long anticipated release of the 9300 Communicator ensured that the launch was met with healthy demand in 1Q. However, enterprise-focused, data-centric Series 80 devices still constituted less than 6% in 1Q,” said Andrew Brown, program manager for European Mobile Devices. “Consumer
adoption of Series 60 devices through handset upgrades and contract renewals are responsible for the majority of Nokia’s converged device growth.”
Canadian vendor RIM held second position in 1Q, with year-on-year growth of 368%, although shipments of 150,000 represented a slowdown on the enormous sequential growth the vendor witnessed throughout 2004. In addition, Motorola and T-Mobile had successful quarters, with growth of 271% and 548%, respectively, as the operator witnessed significant demand for its Windows Mobile SDA device, and in particular the media-centric SDA music in Germany.
Vendor Highlights
· Nokia – The Finnish vendor witnessed a rare increase in market share in 1Q to 45% of the mobile devices market, fueled by growth of 63% and shipments in excess of 1.1 million units. The launch of the Series 80 9300 to complement the 9500 released in 4Q04 increased adoption of converged
devices in the enterprise segment, although converged device volumes were still largely directed through traditional operator channels to consumers.
· HP – Year-on-year growth for HP was flat at 6%, causing a decline in market share to 8% due to heavy competition from low-cost white box vendors targeting the consumer GPS market across Europe in 1Q. However, HP has the most comprehensive enterprise business of all handheld vendors, the knowledge and experience of which is central to HP increasing its commitment to the converged device segment in 2005.
· palmOne – palmOne continued to suffer a decline in market share in 1Q05 to 6% overall, due to negative growth of 29%. The growing preference for Pocket PC and competition from white box vendors heavily impacted the vendor’s handheld business due to the bias of the product mix towards low
and midrange consumer devices. Despite the fragmented introduction of the Treo 650 to Western Europe, IDC predicts more positive shipments of the converged device in 2Q as operator support and promotion increases.
· RIM – Despite year-on-year growth of 368% and shipments of 150,000, 1Q witnessed the first sequential decline in Western Europe since the final quarter of 2003. However, with operator support from T-Mobile and O2 now complementing Vodafone, the Canadian vendor has secured a strong position
for what promises to be a prolonged fight for control in the messaging segment in 2005.
· Sony Ericsson – Despite moving back into the Top 5 in 1Q04, negative growth of 13% and a decline in market share is tangible evidence of the requirement for a refresh to its device portfolio. While the P900 series has proven popular in high-end segments, the lack of a more consumer-orientated device in a Nokia Series 60 mold is greatly limiting Sony Ericsson in a market still dominated by consumer handset upgrades.