Demand for PDAs has declined due to continuing economic stagnation, according to a survey this week by analyst Gartner.
Shipments were down 11.1 per cent to 2.8 million in the first quarter of 2003, compared to the same period last year.
Palm's market share continued to decline but it remains the market leader with almost a third (32.8 per cent) of sales, more than twice that of its nearest competitor, Hewlett Packard (HP).
HP holds 16 per cent of the market, followed closely by Sony with 13.3 per cent. Toshiba showed the strongest growth with an increase of 276 per cent, while Sony saw a 60 per cent increase.
On an end-user revenue basis, Windows CE PDA licences surpassed those of the Palm operating system for the first time, accounting for 52 per cent of the market compared to Palm's 37 per cent.
Gartner analyst Todd Kort indicated that Dell's entry into the market had not affected HP, but added that Palm needs to make better high-end products to keep its lead.
"Roughly half of Palm's shipments in the first quarter of 2003 were from the $99 Zire," he said in the report.
"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."
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