European PDA market shrinks by 16 percent

Shipments of handheld computers have fallen significantly from early last year, as manufacturers cut their inventory and take a more realistic view of their sales prospects

The Western European market for personal digital assistants (PDAs) is still hungover from its 2001 binge, with shipments for the first quarter of this year declining 16 percent from the same quarter a year ago, according to analysts Gartner Dataquest.

Shipments for this year are suffering by comparison to early last year, when companies such as Palm flooded distribution channels with its products in anticipation of booming sales. Instead, demand tapered off.

Now that the dust has settled, and companies have reduced their inventory to more reasonable levels, Palm is left with 34.8 percent fewer shipments for the first quarter of this year, compared with the same quarter last year. However, it is still Europe's leader, shipping 221,175 units and holding 39.4 percent of the market. The decline was expected, Gartner said.

Handspring also declined in PDAs, its shipments falling 28.1 percent to 32,010, but this is mainly because the company is putting its weight behind the Treo PDA-phone instead of refreshing its PDA line, Gartner said. Treo sales aren't included in Gartner's figures. In the Palm OS-powered PDA market, Handspring ceded ground to Palm and Sony.

The winners in both shipments and market share were Pocket PC PDA vendors Compaq, Casio and HP, all of which increased their market share due to their focus on corporate sales, Gartner said. Compaq is the second-ranked vendor after Palm, increasing shipments by 32.7 percent to 134,700 for 24 percent of the market. Pocket PC devices are significantly more expensive than Palm devices, so that vendors can make higher revenues without selling as many units.

Casio is a distant third in the market, shipping 47,250 units and holding 8.4 percent market share.

Wireless is a growing force in the PDA market, with the release of PDAs featuring built-in GPRS and Bluetooth, wireless technologies for connecting to wide-area data networks or peripherals. Vendors like Compaq, which sells an integrated Bluetooth version of its iPaq PDA, are using the wireless technology to forge alliances with mobile phone operators.

"Gartner believes (such alliances) will create new routes to market and business opportunities for vendors through the rest of 2002," the company said in a statement.


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