PDA industry slides with smartphone's popularity

As smartphones and enhanced mobile phones gain popularity, PDA shipments are slipping with 11.5 million units in 2003, a 5.3 percent decline from 2002, according to 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," stated 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," he noted.

"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.

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," Kort added.