Gartner Dataquest Says Second Quarter Handheld Shipments Declined 21 Percent from the First Quarter of This Year

Worldwide PDA shipments reached 2.8 million units in the second quarter of 2001, a 21 percent decline from the first quarter of 2001, according to Dataquest Inc., a unit of Gartner, Inc. (NYSE: IT and ITB).

Palm maintained the No. 1 position both worldwide and in the United States based on shipments (see Tables 1 and 2), but Palm lost significant market share since the first quarter of this year. Compaq more than doubled its market share from the first quarter this year because of its success in the corporate market.

"The corporate market offers the greatest opportunity for PDA vendors. There have been strong consumer shipments in the past, but the consumer market is much less profitable and is not likely to grow as fast as the corporate market. PDA vendors that do not have a strong enterprise strategy will miss out on the bulk of market growth over the next year," said Todd Kort, principal analyst of Gartner Dataquest's Computing Platform Worldwide group.

The corporate market is not yet seeing many 500-plus unit purchases, but this market is poised for tremendous growth as packet-switched wireless e-mail capabilities are added next year. "IT managers have generally been dragging their feet in endorsing the use of PDAs," Kort said. "This resistance will subside as users are better able to justify the productivity enhancement offered by PDAs with wireless e-mail and applications that sync smoothly with corporate data repositories."

Worldwide PDA Unit Shipment Estimates for 2Q01 (Thousands of Units)

Company Maret 2Q01 Shipments Share (%) Market 1Q01 Shipments Share (%)
Palm 898 32.1 1,790 50.4
Compaq 450 16.1 278 7.8
Handspring 300 10.7 565 15.9
Hewlett-Packard 193 6.9 130 3.7
Research in Motion 115 4.1 163 4.6
Hi Tech Wealth 110 3.9 39 1.1
Others 730 26.1 585 16.5
Total Market 2,796 100.0 3,550 100.0

Source: Gartner Dataquest (August 2001) *T

Gartner Dataquest analysts said the PDA market has essentially been divided into two segments since the introduction of Windows CE 3.0 in April 2000.

"One PDA market is an organizer-oriented market, typified by Palm and Handspring. Users of these devices want an easy-to-use, inexpensive, pocketable device that helps keep them organized," said Kort. "The second market is a business application-focused market that wants a more powerful PDA to sync with the applications they use on their PC, typified by Compaq's iPAQ 3xxx and the HP Jornada 5xx series. The latter market yields a higher average selling price and is more immune to the current economic downturn because of low corporate penetration and a more compelling set of applications that can take advantage of the greater processing power that platform provides."

U.S. PDA Unit Shipment Estimates for 2Q01 (Thousands of Units) 

Company Maret 2Q01 Shipments Share (%) Market 1Q01 Shipments Share (%)
Palm 509 40.0 1,050 54.2
Handspring 220 17.3 421 21.7
Compaq 204 16.0 144 7.4
Hewlett-Packard 106 8.4 58 3.0
Research_in_Motion 105 8.2 147 7.6
Others 129 10.1 119 6.1
Total_ 1,273 100.0 1,938 100.0

Source: Gartner Dataquest (August 2001)

This information is produced by Gartner Dataquest's Computing Platforms Worldwide research cluster. This program is designed to help companies focus on real opportunity, with coverage of the complete range of computer hardware platforms as well as associated supply chain components, systems, distribution channels and end user groups. For more information on how to subscribe to this program, please call 408-468-8000. Reports can be accessed on the Internet at

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