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PDA Sales Stall as Users Wait for Upgrades

Anticipating the October release of Pocket PC 2002, users postponed earlier plans to purchase handheld computers.

Joris Evers, IDG News Service

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Sales of personal digital assistants dropped in the third quarter as users waited for Microsoft's Pocket PC 2002, according to market researcher Dataquest, a division of Gartner.

Worldwide PDA shipments in the third quarter totaled 2.54 million units, down 9.5 percent from 2.81 million the previous quarter. Shipments of PDAs based on Microsoft's platform made up 18 percent of the overall market, down from 30 percent in the second quarter, Dataquest says in a news release.

Users knew Microsoft would launch Pocket PC 2002 in October, leading them to postpone buying, Dataquest says.

Compaq Computer, the largest vendor of PDAs running Microsoft's software, saw shipments of its iPaq shrivel from the 450,000 it shipped in the second quarter to 185,000 in the third quarter. Compaq is now the third-largest vendor of PDAs in the world with a 7.3 percent market share, down from second place and a 16 percent share in the second quarter, according to Dataquest.

Microsoft continues to trail Palm. Over half (52 percent) of the PDAs sold in the third quarter run the Palm OS, Palm's operating system. Palm OS shipments declined 3 percent from the second quarter, according to Dataquest.

Palm also dominates the global PDA device market with a 29.7 percent share, slightly down from 31.7 percent in the second quarter. The company sold 754,000 units, down from 890,000 last quarter.

Handspring and Casio Computer are the only two PDA vendors that managed to increase their market share in the third quarter, according to Dataquest.

Handspring, which sells Palm OS-based devices, shipped 352,000 units, up from 300,000, and Casio sold 143,000 units based on Microsoft's platform, up from 94,000. Handspring is the world's second largest vendor, with a 10.7 percent share. Casio comes in fourth with a 3.3 percent share, according to Dataquest.

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