Study: PDA Shipments Up 3% in Second Quarter

Customers are flocking to PDAs that have wireless e-mail and keyboard capabilities, Gartner says.

A new study confirms that the market for wireless-connected PDAs is growing, while the traditional handheld market continues its steady decline.

The study, by analyst firm Gartner, of Stamford, Conn., concluded that worldwide market for PDAs grew about 2.7 percent from the second quarter of 2005 to the second quarter of this year.

Overall, there were 3.7 million PDA units shipped in the second quarter of 2006 compared to 3.6 units a year ago, according to Gartner.

PDA revenues declined about 4 percent to $1.38 billion, due in part to aging product lines and drops in price.

"The PDA market is in a sort of slow but steady growth phase right now," said Todd Kort, a principal analyst at Gartner. "Right now, theres nothing on the horizon that I see that will cause a change in that."

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The Gartner report was in sharp contrast to IDCs PDA market study of the same time period, which calculated a 26.3 percent decline in shipments between the second quarters of 2005 and 2006.

IDC, however, measures the market differently. It does not count Research in Motions BlackBerry or PDAs with voice-communications capabilities.

Gartner includes the bulk of RIMs BlackBerry devices in its PDA survey. However, it excludes the BlackBerry 71xx family along with devices like Palms Treo 700w, which it considers to be smart phones. The definition is based on how the devices use their network access. PDAs must use wireless primarily to obtain data but can offer voice connectivity as well, whereas smart phones use their wireless access primarily for voice communications, according to Gartner.

Despite a 1 percent decline in the number of units RIM shipped, as measured by Gartner, the BlackBerry maker remained the leader in PDA sales with 22.5 percent market share, according to the Gartner report.

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Mio Technology grabbed more than 8 percent of the market share in the second quarter, mostly in Europe, by shipping 303,377 of its PDA products, which focus on GPS navigation.

The losers in the study included Hewlett-Packard, which saw sales decline by 15 percent from last year, Palm, which saw a 26 percent decline, and Nokia, which suffered a 40 percent decline.

Kort said he believes these declines in market share stem from companies that have not refreshed their product lines and may plan not to do so until Microsoft launches its new PDA platform in the spring of 2007 at the earliest.

Kort also sees a decline in the low-end PDA market, as more consumers look for handheld devices that have keyboard capacities and access to wireless e-mail.

However, Kort said HP could bounce back when its new iPAQ 69xx begins selling in the United States. Meanwhile, Palm has focused its energies on the Treo smart phone product line.

The Gartner study also found that the cost of PDAs fell about 6 percent for an average price of about $373.

In the coming quarter, Kort predicts that sales will hold steady at about 3.7 million. In the coming two years, sales might increase as more and more enterprises turn to PDA to help with sales and other business functions, he said. Additionally, Kort suggested that more businesses will give employees PDAs or reimburse them for purchases.

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