Third quarter sales of handhelds fell 4.6% sequentially and 8.7% year-on-year, to 2.1 million units.
Market success will go to those that extend handheld devices into markets beyond core PIM functionality, such as GPS bundles, IDC said.
China's electronics industry size is now more than three times that of southeast Asia's, and is projected to become five times as large by 2010.
"Electronic exports from China will decrease from the current 25% of total output as the domestic market for consumer electronics, telecommunications, computing and advanced automotive products picks up," Fusion said. "The 3G revolution and the 2008 Olympics in Beijing will really give this sector a boost."
Meanwhile, southeast Asia's electronics market will reach $96 billion by 2010, an annual growth rate of 7.6%. Fusion says.
The firm predicts Singapore will be the region's top producer, with output of $17 billion by 2010, followed by Thailand ($14 billion), Malaysia ($9 billion), Indonesia ($7 billion), and the Philippines ($6 billion).
The Kester lab will use a SlimKIC 2000 and Navigator tools for defining process windows and selecting ovens or wave solder recipes.
"We are excited about this opportunity to work so closely with Kester Europe. Kester's solutions are in line with KIC's high standard of quality, and we feel that the SlimKIC 2000 and Navigator tools will help Kester elevate their solutions and customer service to the next level," said Bjorn Dahle, President of KIC.