This IDC study is an update to Worldwide Smart Handheld Device 2004?2008 Forecast Update: The Shift Toward Converged Devices, December 2004). This document delivers 2004 actual shipments and vendor market share comparisons for 2003 and 2004 and updates the long-range forecast through 2009.

In the history of the smart handheld devices market, 2004 marked the first time that worldwide shipments of converged mobile devices surpassed those of handheld devices. Despite a slight rise in quarterly shipments in the fourth quarter of the year due to holiday seasonality, the worldwide handheld device market experienced its third straight year of decline, while the converged mobile device market surged past its previous shipment level in 2003. The year 2004 also marked the first time since 1999 that annual device shipment levels slipped below 10 million units.

The decline of the handheld device market further underscores the increasing difficulty and search for relevance that handheld device vendors are facing in today's marketplace. With top vendors Sony and Toshiba leaving the market and competition from converged mobile device vendors continuing to increase, the remaining handheld device manufacturers face significant pressure to evolve their devices into new market segments.

"Although the potential for a return to growth in the handheld device market remains, stiff competition from converged mobile devices and increasingly saturated markets have significantly increased the barriers to growth for handheld device vendors. As a result, converged mobile devices grew to comprise the majority share of shipments in the smart handheld devices market during 2004." ? David Linsalata, research analyst, Mobile Devices