News
Issue #2003 - 04 (February 2003)
(Updated Feb. 5, 2003)

MARKET OUTLOOK

PDA Shipments Dropped More Than 9% Last Year, to 12.2 Million Sales; Palm retains market lead.

Source: Gartner's Dataquest Via Antone Gonsalves, TechWeb News

Reduced sales to businesses was the key factor in a 9.1% decline in shipments of PDAs last year, a study released Monday showed. Vendors shipped 12.1 million PDAs in 2002, down from 13.3 million the previous year, according to Dataquest, a unit of market-research firm Gartner. Consumers looking for a handheld device to track their schedules and access the Internet bought 70% of the PDAs, with businesses purchasing the remaining 30%. 

"The more lucrative enterprise market has been stagnant because of poor economic conditions and a perception that PDAs aren't yet capable of delivering sufficient return on investment," Gartner analyst Todd Kort said in a statement. "The enterprise market is still another year away from embracing PDAs."

Palm Inc. led the way by shipping 4.4 million units, a decline of 12.2% from 2001, followed by Hewlett-Packard, which shipped 1.6 million PDAs--27.2% less than last year. Sony was No. 3, shipping 1.3 million units, 163.2% more than 2001. Market shares of the three companies in 2002 were 36.8%, 13.5%, and 11%, respectively.

The Palm operating system was the leader among PDA operating systems with 6.7 million units, representing 55.2% of the market. Microsoft's Windows CE totaled 3.1 million units, or 25.7% of the market.

The failure of wireless technology to live up to expectations was a key factor in businesses' lack of enthusiasm for PDAs. "Wireless infrastructure is still immature, and wireless data-security issues haven't been fully resolved," Kort said. "End users still have too many hassles getting wireless devices properly configured. On top of this, wireless data speeds are typically much less than advertised, and costs per megabyte are relatively high, especially in the United States."

MobileInfo Comments and Advisory: While we generally agree with research findings from Gartner, we want to stress that the study only notes the state of affairs as they see from market statistician's point of view. For the enterprise, the messages we would like to read from this study are:

• Around 4 million (30% of 12 million) PDAs were deployed in the enterprise. Remember these are early deployments and the entire workforces have not been mobilized. In an adverse economic environment, this is a good going. 
• Palm leads but it does so in the overall numbers. In the enterprise market, its share is smaller. Serious applications require serious handheld devices and we must match device to the information requirements of the task at hand.
• Start wireless application deployment carefully. Infrastructure is getting better but there is still a lot of work for service providers.

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