The European handheld market returned to double-digit growth in the fourth quarter of last year thanks to low prices and retail bundles, according to analyst house IDC. This was the first annual growth in unit shipments since 2000.

IDC senior analyst Tim Mui said: "A consumer market drawn to attractive low-cost pocket PC offerings and a renewed interest in mobile solutions from large and medium enterprises helped pocket PC devices to overtake Palm OS-based products in 2003."

Andrew Brown, program manager for mobile devices at IDC said: "The healthy double-digit growth of the handheld market in both the forth quarter 2003 and for 2003 overall suggests that by pricing aggressively and offering attractive bundles such as GPS navigation systems it is possible for vendors to stimulate growth in the handheld market by creating demand through innovative marketing."

Shipments for the fourth quarter 2003 grew to 958,000 units, a growth of 38 per cent compared to the same period last year. The quarter boosted shipments to a record 2.6 million units in 2003, representing growth of 27.5 per cent.

Shipments decline

But despite the positive outlook, the forth quarter saw Palm's market share decrease to 30 per cent and 2003 was Palm's third consecutive year of annual decline in shipments. But the company remained the leading vendor for 2003 overall.

Sony also saw a decrease in shipments. The company shipped 76,130 units in the quarter – a 3.5 per cent decline compared to the same period last year.

According to IDC: "Sony has been unable to build significantly on its strong entry into the handheld space. Part of this is due to the lack of a complete retail presence throughout Europe, but also because of Sony's focus on its high-end devices, while in reality its more basic models are more popular with consumers.

"Over 80 per cent of its sales came from two entry-level models, the TJ25 and TJ35, introduced to address the Christmas retail market. The higher-priced UX50 clamshell product was introduced in Q4 '03 to offer differentiation in the retail market."

According to IDC, HP was able to grow its market share to 37 per cent.