European analyst firm Canalys expects shipments of smartphones to exceed those of handhelds in the Europe, Middle East & Africa (EMEA) region for the first time in 2003, according to its new report - EMEA Mobile Device Trends 2003.

Senior analyst Andy Buss said that the smartphone segment of the mobile device market (which in the report includes devices such as the Orange SPV and Sony Ericsson P800) is expected to be around 3.3 million units in 2003, compared with around 2.8 million handhelds and wireless handhelds (such as the Palm Tungsten T, the HP iPAQ series, the RIM Blackberry, O2 xda and T-Mobile MDA).

"We anticipate that smartphone shipments alone will be an order of magnitude greater in 2003 than in 2002," Buss added. "2002 was the tip of the iceberg for this category of device, but we expect the handheld segment to grow in 2003 too, after performing poorly last year."

According to Canalys, handheld vendors shouldn't try to counter the smartphone boom by launching wireless handhelds (those with integrated GSM/GPRS/3G capability), which have sold in only tiny quantities and will continue to do so according to Buss, "Vendors should only launch wireless handhelds if they can differentiate themselves substantially from the devices that are already out there. “

So if the wireless handheld is a poor phone, how do the new generation of phones rate as personal organizers? "They are getting better," says Buss. "In 2002 the Nokia 7650 feature phone was the device that took the market by storm, but it was bought as a camera phone rather than as some kind of handheld replacement. While it can do many of the things traditionally associated with a handheld, that isn't where it excels.”

Canalys said devices like the Sony Ericsson P800, which improves over the Nokia 7650, will help people see the benefits of having an integrated device. In addition, some users will also prefer the larger display and features of a handheld, helping that category to also grow in the near future after the poor sales of last year.