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In 2004, shipments of handheld devices slipped to less than 10 million units for the first time in five years. During 2004, 9.2 million devices were shipped, a decrease of 13 percent from last year's total of 10.6 million devices shipped. "The vendors haven't been able to break away from the personal information manager [PIM] market," Linsalata said. "The handheld computer needs to evolve beyond its core functionality."

One such example is GPS (Global Positioning System) capability, which most vendors offer today. But Linsalata couldn't point out any new drivers likely to push the market up to its peak levels of 2001. "Not yet, but the handheld computer has certain adequate advantages such as larger and brighter screens, bigger batteries, and attached keyboards," he said.