Palm held onto the top spot in the worldwide rankings with 32.8 percent of PDA shipments, according to Gartner. Although Palm shipped more that twice the units of its nearest competitor, its market share continued to decline. Hewlett-Packard remained in the number-two spot with 16 percent of the market, followed by Sony, with market share of 13.3 percent. Toshiba and Sony showed the strongest growth among the top-tier vendors with growth rates of 276 percent and 60 percent, respectively.
"Roughly half of Palm's shipments in the first quarter of 2003 were from the $99 Zire. While Palm makes good margins on this unit, it needs better products at the upper end of the market if it is to maintain its strong position in the enterprise market," said Todd Kort, principal analyst for Gartner's worldwide computing platforms worldwide group. "HP was forced to take a more aggressive pricing posture because of Dell's entry into the market, but otherwise Dell has not yet seriously eroded HP IPAQ sales."
Palm remained in the lead in the U.S. PDA market with 38.2 percent of the market, the firm reported. However, Palm was the only top-tier vendor to post negative growth. Sony moved up one spot to the number-two position with a 16.6 percent market share. HP fell to No. 3 with 13.5 percent of the market.
"Dell continued to perform well, as first-quarter 2003 shipments of the Axim nearly tripled those from the fourth quarter of 2002. Momentum remained strong as Dell applied various promotions to maintain high levels of demand for its aggressively priced PDAs," Mr. Kort said.
Gartner reported that Palm OS PDA shipments represented 49 percent of the worldwide market, despite a shipment decline of nearly 400,000 units from one year earlier. The Windows CE market share totaled 36 percent in the quarter, as shipments increased by over 330,000 from one year ago. On an end-user revenue basis, Windows CE PDAs accounted for 52 percent of the market in the first quarter of 2003, while Palm OS licensees had 37 percent of the market, marking the first time Windows CE PDA revenue has surpassed Palm OS.