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Worldwide PDA Industry Suffers 5 Percent Shipment Decline in 2003
Posted: 01-Feb-2004 [Source: Gartner]

[Gartner predicts smartphones offering e-mail and personal information management to have an ongoing negative impact on the low end of the PDA market.]

Stamford, CT -- PDA vendors are beginning to feel the impact that smartphones and enhanced mobile phones are having on the industry, as worldwide PDA shipments totaled 11.5 million units in 2003, a 5.3 percent decline from 2002, according to preliminary results from Gartner, Inc.

"Through the end of 2004, smartphones will generally have a negative impact on the low end of the PDA market, as many individual users will find the personal information management (PIM) and e-mail capabilities of smartphones acceptable," said Todd Kort, principal analyst in Gartner's Computing Platforms Worldwide group. "These users will tend to become less interested in low-end PDAs that have provided these capabilities."

"This will primarily impact the Palm OS because a relatively high percentage of Palm OS users rely on these devices solely for their PIM capabilities. Smartphones will become more important in the enterprise market in 2005, at which point we expect to see increasing erosion of the Microsoft side of the market," said Kort.

Research in Motion (RIM) thrived in the fourth quarter of 2003, as shipments totaled, 259,000 units, nearly equaling the total it shipped in all of 2002. RIM posted the strongest growth rate among top-tier vendors in 2003, as shipments increased 121 percent from 2002 (see Table 1). Approximately 35 to 40 percent of recent RIM shipments were upgrades of older RIM devices. RIM's subscriber base is now close to one million users worldwide.

Gartner analysts said Hewlett-Packard was the most aggressive vendor in the second half of 2003, as it released seven new PDA models that hit price points ranging from $199 to $599. palmOne did well with the Tungsten T3 for the midrange PDA market, but palmOne, Sony, Dell, and Toshiba found the majority of demand for their products in the fourth quarter of 2003 was for sub-$250 models.

In the U.S. PDA market, palmOne was still the No. 1 vendor based on shipments in 2003; however, it suffered a double-digit decline. In 2002, the company accounted for more than half of all PDA shipments, but in 2003, its market share slipped to 43.3 percent (see Table 2).

On a regional basis, Asia/Pacific contributed to much of the worldwide decline in PDA sales. PDA shipments in Asia/Pacific declined 30 percent in 2003 and dropped 25 percent in Japan. PDA shipments in Western Europe increased 12 percent.

"The U.S. market continues to consume just over half of all PDA shipments, and the U.S. PDA market is the key segment for overall growth," Kort said. "However, a weakening U.S. dollar is forcing U.S. PDA prices up because most PDAs and their components are manufactured in Asian markets, particularly Taiwan. Therefore, we expect good results in Europe, but mediocre sales in North America in 2004."

Gartner analysts will provide detailed analysis on the impact wireless technologies can have on enterprises during the Gartner Wireless and Mobile Summit at the Chicago Downtown Marriott, March 8-10. Gartner analysts will examine the risks that mobile vendors and users will face in a future of accelerating technological and business change. Additional information is available at www.gartner.com/us/wireless. Members of the media can register by contacting Cindy Sandberg at cindy.sandberg@gartner.com.

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