The worldwide personal digital assistant (PDA) market experienced a slight increase in revenue, as PDA shipments experienced a single-digit decline in the second quarter of 2002, according to preliminary results from Dataquest Inc., a unit of Gartner Inc., Stamford, Conn. The combination of Hewlett-Packard and Compaq was barely enough to surpass Palm for the No. 1 position in PDA market revenue in the second quarter.
"Palm and HP did not ship in volume any new models during the quarter. The decline in Jornada and iPAQ shipments from a year ago is largely a result of economic conditions, relatively high prices and lack of diversity across their product line. Customer anticipation of new Pocket PC models based on Intel's XScale microarchitecture also delayed some sales," says Todd Kort, principal analyst for Gartner Dataquest. "Likewise, the release of Palm's OS 5 in early June is putting a damper on sales in this category until new PDAs using this software and new ARM-based processors are ready in a few months."
Worldwide PDA end-user revenue in the second quarter of 2002 totalled $902 million, a 1.5% increase from the second quarter of 2001. PDA shipments reached 2.7 million units, a 3.5% decline from the second quarter of last year. Palm continued to lead the industry in terms of unit shipments, as it shipped nearly double the volume of HP in the second quarter of 2002. Palm accounted for 30.3% of all units shipped, while HP had 16% of worldwide shipments in the quarter. Both vendors shipped substantially fewer units compared to the same quarter a year ago.
In the U.S. market, Palm captured more than 40% market share, with Sony, HP and Handspring close together but well behind Palm. Sony introduced six new models so far this year, and as of late July it has all the major price points covered.
"Sony made a big splash with the Clie NR70V, which integrates a tiny digital camera," Kort says. "Toshiba is benefiting from the excellent price/performance and slim form factor of its e310, and the new e740 is also off to a strong start. Toshiba made significant progress by greatly expanding its reseller base. Handspring continues its gradual withdrawal from the PDA market, focusing instead on smartphones, but IT leveraged the small Treo form factor with the new Treo 90."
PDA OS shares were largely unchanged from a year ago. Palm OS PDAs captured 50% of the worldwide PDA market in the second quarter of 2002, with approximately 1.35 million units shipped. Vendors of Microsoft Windows CE PDAs held nearly 28% of the worldwide market, up 2.6 share points from a year ago. Proprietary OS devices, especially popular in Asian markets, were steady at about 20% of the worldwide PDA industry.
Geographically, the U.S. market accounted for 48% of worldwide PDA shipments in the second quarter of 2002. The Asia/Pacific region was second with approximately 20% of the market, followed by Western Europe, which had 18% of PDA shipments in the quarter.
"The enterprise market is likely to remain relatively stagnant until new budget cycles are in place and more compelling value propositions are available," Kort says. "It's difficult for many enterprises to justify high-end PDAs when more robust notebook computers cost only a few hundred dollars more."
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