Mobile phones ring PDA’s bell

Worldwide shipments of personal digital assistants declined for the eighth consecutive quarter, as makers of the handheld devices felt the continued pressure from mobile phones offering similar capabilities, according to a market-research firm.

Shipments dropped 0.2 percent in the third quarter of 2003, to 2.517 million, compared with 2.523 million the same period last year, Gartner said. It was the eighth year-over-year decline.

Contributing to the drop in sales is the continuing slump in the global economy and weak sales to businesses, the research firm said. Consumers buy about 70 percent of all PDAs, with the remaining 30 percent purchased by enterprises.

'What's also happening is mobile phones, including smart phones and Java-based phones, are offering the basic PIM [personal information management] functions that enable consumers to get by with a phone,' Gartner analyst Todd Kort said.

The market is expected to continue eroding, or stay nearly flat at best, as consumers shift to handsets with calendars, address books, and other PIM capabilities. Businesses, however, are expected to eventually increase purchases of PDAs, which sales staff and service reps can use to access corporate data.

The percentage of PDAs sold to consumers and enterprises could reach at least parity in a year or two, and could tilt even more in favor of business at some point down the line.

'PDAs are not going to go away,' Kort said. 'Wireless PDAs are going to become more popular, particularly with enterprises.'
For the fourth quarter, Kort expects the number of worldwide PDA shipments to fall to 3.4 million, from 3.6 million last year. For the year, the analyst predicts manufacturers will ship 11.4 million units, compared with 12.1 million in 2002.

The global PDA market in the third quarter would have fared far worse, if not for the strong showing of Hewlett-Packard, which reported a 98.5 percent increase that raised the company's market share to an all-time high of 23.1 percent. If HP's results were removed, the PDA market would have declined 13 percent.

HP's results were helped by the launch of five new models that used Microsoft's Windows Mobile 2003 operating system, released in June. HP also was the first to market with OS upgrades for most of its installed base.

HP, in addition, received favourable reviews while lowering prices, which helped it capture the market lead in Western Europe and the Asia/Pacific region, Gartner said.

But Palm managed to maintain its number one position, with a 6.5 percent jump in shipments. Palm's market share rose to 34.2 percent from 32.1 percent. The number of US shipments, however, dropped 0.6 percent, as the company's low-priced handheld devices felt the competitive pressure from cellular phones, Kort said.

Number three Sony saw a 24.1 percent drop in shipments and a decline in market share to 10.1 percent from 13.3 percent. Dell was No. 4, with a 5.5 percent market share. Dell's shipment figures weren't available, Gartner said.

Number five, Research in Motion (RIM), reported a 107 percent increase in shipments, raising its share to 4.9 percent from 2.4 percent. Trailing the pack was Toshiba, which saw a 41.7 percent decline in shipments and a drop in market share to 3.4 percent from 5.7.

RIM benefited from its rapidly expanding international operations, and from customers upgrading their old monochrome models to the color BlackBerry 7200 series.