The sale of converged devices (units that can function as phone, camera, entertainment console, PDA and Web-application platform) rose by as much as 42 per cent during the final quarter of 2006.

Standalone handhelds posted their largest fall yet, down 41 per cent compared to the same period last year, the U.K.-based research firm Canalys.Com Ltd. said.

"The message to vendors here is that they need a converged connected device in their line up," said Pete Cunningham, senior analyst for Canalys.

"The PDA market has been on a downward trend for some time," agrees Kevin Restivo, senior analyst for consultancy firm SeaBoard Group in Toronto.

Market leaders such as Research In Motion (RIM) of Waterloo, Ont. and Palm Inc. of Sunnyvale, Calif., have been vigorous in adding consumer enticing features such as Web browsing and e-mail pushing capabilities to their products, to stay in the top five list, said Restivo.

The Canalys survey said some 22.1 million smart mobile devices were shipped during the fourth quarter of 2006.

Finnish phone company Nokia remained the market leader accounting for 50 per cent of all mobile device shipments. The company shipped 11.1 million smart phones for the period. The phones equipped with the Symbian S60 open source operating systems, particularly the N73 devices, drove up the volume.

Despite increasing pressures from competitors in the mobile e-mail space, RIM performed well during the quarter shipping some 1.8 million devices.

"Sales of its new Pearl smart phone, positioned as a more consumer-oriented e-mail device than its other models, helped RIM increase overall device shipment by 54 per cent and maintain the lead in North America," said Canalys.

Motorola Inc. came in third with 1.4 million devices shipped during the period. Severely affected by the fall in handheld sales, fourth ranked Palm shipped about 1.2 million devices.

Another global survey conducted by Gartner Inc. found that shipment of handheld mobile devices rose by 18.4 per cent to 17.7 million in 2006.

The Gartner survey said RIM's BlackBerry unit retained the top spot for PDA devices shipped, accounting for 10 per cent or 3.5 million units shipped for the year. Palm's PDA shipments slid by 29 per cent to less than 2.8 million units from last year.

The Gartner poll indicated an overall growth in demand for wireless access to e-mail and the Internet. According to the research company, 60 per cent of the devices shipped last year were equipped with cellular connectivity.

Canalys said "although Palm had new smart phones on both Windows Mobile and Garnet OS platforms in Europe Middle East and Africa (EMEA) and the Asia-Pacific region, its usually strong, consumer-led Q4 was impeded by a fall of 45 per cent in worldwide shipments of handhelds, in line with market trends."

Sony Ericsson Mobile Communications AB, pulled in at number five with some 1.1 million units shipped.

Another 5.4 million devices were shipped by other vendors.

In 2007, Canalys expects to see some increased activity around devices using the Linux OS as vendors move away from older proprietary phone operating systems.

Microsoft mobile OS "will receive a boost" from the arrival of new models and new brands using Windows Mobile 6.0, said Canalys.

The research firm, however said, it will be hard to catch up with Symbian "particularly if it provides a competitive foundation for consumer-oriented smart phones at the lower price points that market demands."