"Palm is not as dominant as it once was, but it still shipped more than twice as many units in the third quarter as the number two vendor, HP. Palm engaged in significant promotional activity in the third quarter to reduce inventories and make room for new models that will be launched in October 2002," said Todd Kort, principal analyst for Gartner Dataquest. "Sony PDA shipments have nearly tripled since the third quarter of 2001, and it is on the heels of HP, contending for the number two position. Sony has been averaging about one new model launched in every month of 2002."

In the U.S. market, Palm had a more commanding lead, with nearly 40 percent of all units shipped in the third quarter of 2002. Sony moved into the number two spot with nearly 19 percent market share, followed by HP at 15 percent (see Table B). Sony's U.S. shipments are more than four times the level of a year ago.

For the first time, Microsoft licensees captured more than 30 percent of worldwide PDA shipments, up from 16.2 percent in the third quarter of 2001. Palm and Sony, along with Handspring and a few other Palm OS licensees comprised approximately 48.6 percent of worldwide PDA shipments in the third quarter of 2002, the same as the third quarter last year.

"After a slow but steady decline, the Palm OS market share appears to have stabilized, but new challenges are on the horizon," Kort said. "Much more competitive pricing from Pocket PC vendors beginning in the fourth quarter of 2002 will undoubtedly stimulate growth in Pocket PC shipments and allow Palm less breathing room. Dell and Toshiba appear ready to lead this battle. The Dell entry signals the beginning of a PDA market shakeout that should push out weaker and financially stressed players."

Additional information is available in the Gartner Dataquest Alert "Worldwide PDA Market Remains in Doldrums." This Alert includes preliminary statistics and analysis on the developments of the worldwide PDA industry in the third quarter of 2002.

This information is produced by Gartner Dataquest's Computing Platforms research cluster. This program is designed to help companies focus on opportunity, with coverage of the complete range of computer hardware platforms as well as associated supply chain components, systems, distribution channels and end-user groups. For more information on how to subscribe to this program, please call 408-468-8000. Reports can be accessed on the Internet at http://www.gartner.com.

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