Europeans clamour for handheld devices

The poor economy has not stopped Europeans from buying mobile devices, according to a study by Canalys.

The poor economy has not stopped Europeans from buying mobile devices, according to a study by Canalys.

Second-quarter mobile device shipments in Europe, the Middle East and Africa (EMEA) leapt an astonishing 239% from the year before, largely driven by the arrival of new smart phones.

Data-centric handheld devices, with and without wireless connectivity, increased 51% year on year - the highest rise in over two years. In this segment, Palmretained its lead with a 34% market share, shipping 210,850 units in the second quarter, up 45% from the same period a year earlier.

The second largest supplier was Hewlett-Packard with a 25% share, but its second-quarter shipments grow only 2% to 154,600.

Chris Jones, an analyst at Canalys, attributed the slight increase to HP's focus on clearing distribution channels for new models, expected in the coming months. Jones said he expected the company to have a better third quarter.

Meanwhile, new entrant Medion grabbed the number three position with a low-cost, application-rich handheld device. The German company, which has emerged as one of the country's leading suppliers of desktop and notebook computers largely by selling its products through discount supermarket chain Aldi.

The device, which sold out quickly in northern Germany and is now on sale in the southern half of the country, costs €499 and features navigation software from Tele Atlas and a GPS module, bundled around other organiser applications such as e-mail, address book and calendar.

"We weren't too surprised by Medion's performance in the handheld market because of its successful partnership with Aldi," Jones said. "But what was interesting to see was their strategy of promoting the product not as a PDA but as a navigation system, bundled around a pocket PC. The emphasis was on the application, not the device, and that's certainly different."

Nokia dominated the relatively young market for voicecentric smart phones and combined feature phone segment with a 78% share, shipping 838,650 units in the second quarter compared with 59,220 units for the same period a year ago.

Canalys defines feature phones as devices used primarily for voice with limited storage capabilities and smart phones as devices with greater storage facilities, such as expansion slots, which allow operating system-based applications to be added without restriction.

Jones predicted that feature phones will fade out over the next two to three quarters, to be replaced by smart phones.

Sony Ericsson Mobile Communications, the second largest supplier of voicecentric devices, saw its market share in the second quarter climb to 15% from 4% a year earlier, after shipping 164,750 units from 3,410 units a year earlier.

Orange cam third. In October, it launched the SPV, the world's first mobile phone running Microsoft Windows-powered Smartphone 2002.

The triband phone was manufactured in Taiwan by High Tech Computer. Orange has customised the Smartphone software to give it its own look and feel. 

"We're going to see more operators with their own branded phones moving ahead," Jones said, citing Vodafone and T-Mobile as two examples.

Jones said "it's early days" for the take-up of Microsoft's mobile phone operating system in Europe, which is "still on a learning curve".  The rival operating system developed by Symbian, he said, is firmly anchored in the products of the region's top-tier vendors, including Nokia and Sony Ericsson.

"The mobile phone sector is a very complicated one; products must be rigorously tested," Jones said. "There will be a market for Microsoft's Smartphone but it remains to be seen how large."

John Blau writes for IDG News Service

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