PDA Market Slow in Q3

Microsoft’s Pocket PC 2002 operating system will eventually provide an incentive for some people to purchase a PDA, but it’s October release date appears to have actually slowed some PDA sales during the third quarter of 2001.

Worldwide PDA shipments totaled 2.54 million units in the third quarter of 2001, which was a 9.5 percent decrease from the second quarter of this year, according to preliminary results from Gartner’s Dataquest Inc., unit.

“An October ship date for Microsoft’s Pocket PC 2002 was known a few months in advance to those who follow the PDA market, and customer knowledge of this milestone event appears to have significantly dampened demand for and shipments of Pocket PC products during the third quarter of 2001,” said Todd Kort, principal analyst of Gartner Dataquest’s Computing Platform Worldwide group.

Palm continues to be the No. 1 vendor in the PDA market worldwide and in the United States, but it did experience a slight loss in market share both in the United States and abroad. Handspring moved into the No. 2 position.

The Palm operating system comprised 52 percent of the worldwide PDA market in the third quarter of 2001. Palm OS shipments declined 3 percent from the second quarter of this year. Microsoft Windows CE (Pocket PC) shipments totaled 18 percent of the market in the third quarter, down from the second quarter of this year when Windows CE represented 30 percent of PDA shipments. PDAs based on proprietary operating systems comprised about one-quarter of worldwide shipments in the third quarter of 2001.

Worldwide PDA Shipment Estimates Q3 2001
(Thousands of Units)
Company Third Quarter 2001 Second Quarter 2001
Shipments Market
Shipments Market
Palm 754 29.7% 890 31.7%
Handspring 352 13.9% 300 10.7%
Compaq 185 7.3% 450 16.0%
Casio 143 5.6% 94 3.3%
Hewlett-Packard 135 5.3% 193 6.9%
Minren 130 5.1% 75 2.7%
Others 838 33.0% 804 28.7%
Total Market 2,538 100.0% 2,806 100.0%
Source: Dataquest

According to the report “Worldwide PDA Markets” from eTForecasts, PDA sales, which passed a milestone in 2000 with unit sales of more than 10 million, will see growth rates well below the 1999 to 2000 increases. Despite slower future growth rates in the 20 to 30 percent range, worldwide sales will exceed 50 million units in 2006.

The economy aside, the future of the PDA market will depend on devices loaded with the features users want. According to a survey commissioned by Motient Corp., the ability to access and use email wirelessly from a PDA ranked first among respondents. Nearly two-thirds of the respondents rated the ability to use wireless two-way email as first on their “wish list” for future services or applications not currently offered on most handhelds. In addition, wireless applications, such as the ability to track stocks, review restaurants, locate addresses and get traffic and weather reports, are extremely important to the PDA user’s lifestyle.

Coupled with email capabilities, the survey uncovered that the top three most important functions that PDA users consider when making a wireless device purchase decision are: reliability of the network on which the device runs, mobility and the cost of the device and monthly airtime fees.

Additional highlights of the Motient survey include:

  • PDA users between the ages of 31 and 40 account for 31 percent of responses followed by PDA users 21 to 30 at 28 percent of responses
  • More than 36 percent of those surveyed own a Palm V series handheld, making it the most popular PDA
  • The top three user application functionalities include calendar and contact information (tied at 77 percent) followed by the ability to use other business applications at 40 percent
  • When asked what characteristics or new applications are most important for future devices, survey answers revealed increased storage/RAM, faster transmission speed of data and real-time wireless email
  • Men are almost twice as likely to use PDAs than women

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