The worldwide handheld device market will shrink 8.4 percent in 2003 to 11.35 million units, IDC says, marking the industry's second straight year of decline. And don't expect much of a rebound in 2004: Less than 15 million units will sell that year, far short of the hoped-for 20 million. As a result of this modest growth, companies such as Dell, Handspring, Hewlett-Packard, Palm, and Research-In-Motion are investigating converged mobile devices.

The strongest year of growth for converged mobile devices will be 2003, according to IDC. Driving this expansion are new Symbian OS-based devices, which should push worldwide shipment totals beyond 13 million units.

The success of converged devices will reflect improved looks and capabilities and a more reasonable price tag, according to Kevin Burden, manager of IDC's Mobile Device research team.

"As device aesthetics and functionality improve and end-user prices continue to decline, converged mobile devices are becoming increasingly accessible to the mainstream consumer and are expected to ship in greater numbers than traditional handheld devices for the first time in 2003," Burden explains.

The increase in converged device sales should continue through 2007, with more mobile phone makers updating their models with high-end operating systems.

"The killer applications of mobile voice and text communication continue to drive converged mobile device sales upward," says Alex Slawsby, research analyst in IDC's Mobile Device research team. "As vendor strategies mature, a greater number of voice-centric devices or 'smartphones' are reaching market with significant volume potential as primary-use mobile phones."

He adds that mixed economic conditions, competition from alternative devices, and limited worldwide appeal will continue to stifle the market for non-voice-enabled handheld devices.