Worldwide sales of handheld devices dropped by 53 per cent in the last three months of 2007, making for the 16th consecutive quarter of year-on-year decline.

The total shipment figure of 683,004 units was also down six per cent on the previous three months, according to research group IDC. And annual sales of three million worldwide were down 44 per cent on the previous year.

The performance bucked expected sales trends, said IDC senior research analyst Ramon Llamas.

"In most mature markets, the fourth quarter typically brings an increase in shipments to meet holiday demand, but this was not the case for the handheld device market," he said.

"User interest has shifted away to other devices that can perform the same tasks, but include features that better meet user demand."

But, despite the problems, the market will not disappear altogether, said Llamas.

"If you look at each quarter of 2007, some leading vendors have seen their shipment volumes start to level off, giving some hope that the market may be finding a sustainable level.

"And suppliers are still introducing new models and reaching first time users.

"If the market was about to disappear, neither of these trends would be taking place today," he said.

Palm was the biggest seller throughout 2007. It had a 50 per cent share in the fourth quarter and 42 per cent market share over the full year.