PDA market: Still growing

The report shows that year-over-year PDA unit shipments are leveling off after several years of rapid expansion. PDAs--handheld or pocket-sized computing devices--are evolving from their earlier incarnation as modest digital organizers to incorporate more of the features of desktop computers.

The firm predicts that the worldwide market for PDAs will reach about 15.5 million units in 2002, an 18 percent growth rate from last year, when buyers pocketed 13 million of the devices, in an 18.3 percent increase from 2000.

Between 1999 and 2000, however, the market grew at a much higher rate: 114 percent.

Gartner attributed the slowdown mainly to the economic downturn in 2001, which also took a toll on the PC market.

As a new market matures, unit-volume growth always levels off. But 18 percent is nothing to sniff at, especially compared with the contraction in the PC market, which declined by about 5 percent in 2001. Recent projections indicate that the PC market will grow by about 3 percent in 2002.

Despite the slower growth, Gartner says the PDA market isn't on the ropes. In fact, the firm says growth could improve again in 2003.

Gartner predicts that the PDA market will regain some of its lost steam the second half of this year, as new models from Palm--based on version 5 of its operating system--hit the market, and competition among vendors intensifies.

Growth in 2003 will likely be fueled by upgrades as new models debut with more powerful processors, greater data storage capacity and new wireless capabilities such as connections to cellular networks for wide-area wireless communications.

As the economy improves, business purchases may also get a boost, giving the 2003 PDA market an additional lift, the firm said.