'In the midst of a gloomy economy and lack of consumer confidence, the hand-held market in Asia contracted along with the rest of the world,' IDC analyst Manny Lopez said.

China's Hi-Tech Wealth increased market share from 23 per cent to 25 per cent, but total shipments were down 26 per cent year on year. Hi-Tech sold 224,100 units in the first half, compared with about 330,000 in the same period last year.

Minren shipped about 125,000 units, about the same as last year, while Legend's shipments fell by a third to 92,600. The decline came even as manufacturers cut prices, IDC said.

Palm shipments fell from 151,200 last year to 130,300. Hewlett-Packard made inroads in the region with its iPaq, increasing shipments 6 per cent year on year to 111,600.

As Chinese-branded units are sold primarily in the mainland, regional competition seems to be between Palm and HP.

IDC said Sony's Clie line 'was also able to make a very noticeable impression in Hong Kong, Singapore and Australia' because of its design and multimedia functions, although it did not give any breakout for Sony shipments.

Regional competition in the hand-held market may increase in the coming months, as Palm's operating system unit targets licensees in the mainland and as Taiwanese manufacturers who made devices for foreign brands plan to introduce their own hand-helds.