Shipments in the third quarter fell to 2.1 million units, down 4.6 percent compared with the second quarter, and down 8.7 percent compared with the third quarter of last year, the market researcher said.
IDC attributed the dip to a drop in shipments from PalmOne and to the gradual withdrawal of Sony from the U.S. market.
PalmOne saw a decline in shipments of 20.3 percent compared with the second quarter, IDC said, and 12.7 percent compared with the third quarter of last year. Its market share is now 34.7 percent, IDC said. However, the market researcher also said PalmOne expects stronger sales during the holiday season. PalmOne recently released a new Treo smart phone with a higher-resolution screen and a faster processor.
By contrast, Hewlett-Packard saw its shipments rise 22.4 percent, compared with the second quarter, and 11.7 percent compared with the third quarter of last year. Its market share is now 30.6 percent, IDC said.
With its x30 device, Dell increased its sales 29.7 percent compared with the second quarter and 44 percent compared with the third quarter of last year. IDC said the recent release of the x50, as well as the company's direct-sales model, could help Dell see a strong fourth quarter.
Mitac International, which occupies the fourth-highest slot in the rankings with its low-cost handhelds, has 3.2 percent market share, IDC said. Its shipments shot up 210 percent compared with the second quarter, IDC said, and 1008 percent compared with the third quarter of last year.
IDC's data differs somewhat from a report released in July by research company Gartner, which said handheld sales rose in the second quarter. The difference is that Gartner included the BlackBerry, Research In Motion's wireless device, in its computations, and IDC did not.
IDC's report also said lower entry barriers could benefit new players just coming into the market and help them gain market share. But such gains will come at the expense of margins because of a stagnant market.
Success in the handheld market is becoming linked to the ability of gear makers to develop new applications beyond the regular personal information management functionality, the company said.
"It is crucial that vendors push handheld devices into new market segments through the integration of existing technology such as GPS bundles in order to energize this market and return it to a growth path," David Linsalata, mobile devices analyst at IDC, said in a statement.