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Microsoft Now Leads in PDA, Embedded OS - InternetNews.
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Microsoft Now Leads in PDA, Embedded OS

Two new studies show Microsoft is now leading both the embedded operating system category as well as in PDAs.

According to statistics by research firm Gartner , Microsoft's Windows CE was the leading operating system for PDA deployments in the third quarter of 2004.

This marks the first time that Microsoft has beat perennial PDA OS leader PalmOne in the category that Palm helped to pioneer. Palm OS shipments declined by 28 percent, according to Gartner, and its market share fell from 46.9 percent in 3Q03 to 29.8 in 3Q04.

Windows CE recorded 32.6 percent growth and saw its share hit 48.1 percent up from 41.2 percent last year.

According to Todd Kort, principal analyst in Gartner's Computing Platforms Worldwide group, Microsoft's dominance was not unexpected.

"We actually thought that the third quarter was going to be the first quarter in which Palm OS was passed by Microsoft," Kort told internetnews.com.

"There's a 50/50 chance that PalmOS will retake the lead in the fourth quarter due to the holiday season. Longer term, 2005 and beyond, it's going to be Microsoft in the lead except for the fourth quarters of each year."

In terms of actual vendor units shipped however, PalmOne still leads with a 26.2 percent market share, which is a decline from 34.3 percent for the same quarter last year. HP holds the number two spot at 24.2 percent, up from 23 percent last year. The biggest gainer was Research in Motion, which saw its share jump from only 4.9 percent last year to 19.8 percent this year.

Linux also lost ground in the sector. Gartner found a negative growth rate of 49.5 percent and reported only a 0.9 percent market share.

"It's unlikely to make much of a comeback at least until 2007 or beyond," Kort said of Linux for handhelds. "Sharp PDA's have been using it but declining in sales. I don't see anyone really picking up the banner and moving forward with it."

Kort also noted than some PDA users are buying HP's iPaq handheld and then "flashing" them with a Linux OS. "It's not a major phenomenon but there is probably as much of that going on as there is of the Sharp units that come loaded [with Linux]," Kort explained.

Kort said Microsoft is rapidly assuming control of the enterprise PDA market. "People are familiar with the Microsoft tools so they don't need to hire new staff to program for Palm or for Linux."

"It looks pretty much like Microsoft has won over another market," he added.

The PDA market isn't the only new embedded market that Microsoft has won either. According to research firm Venture Development Corporation (VDC), Microsoft was the leading vendor of embedded OS for 2003. VDC placed Microsoft ahead of Wind River, Palm and Symbian.

John Starkweather, product manager of the mobile and embedded devices division at Microsoft, is not surprised by statistics showing Microsoft leading in the embedded space.

"Over the past year, Microsoft has announced Windows CE 5.0, Windows XP Embedded with Service Pack 2 and Windows Embedded for Point of Service," Starkweather told internetnews.com.

"In the Windows Mobile space, we are working with more than 35 manufacturers and 60 mobile operators in 28 countries to deliver Windows Mobile-based devices to market. Microsoft's success to date is definitely contingent on our strong industry partnerships."

Of late, with strong announcements from WindRiver, MontaVista and Trolltech, embedded Linux would appear to be gaining momentum in the space.

But this would also appear to be at least one sector where Microsoft doesn't see Linux as a threat.

"Our primary competitor in the embedded space is proprietary in-house operating systems," Starkweather said. "We see Linux as falling in the same category, continuing the trend of proprietization and fragmentation. Linux lacks mature tool chains, and embedded software vendors that support Linux in embedded devices are further diluting and fragmenting the code base."

According to Starkweather, Microsoft is working with device makers that are building everything from IP set-top boxes to the next generation of Windows Mobile phones. The embedded market is going to be driven by a number of critical factors.

"First we see Moore's law applying itself on the hardware side resulting in smaller and more powerful devices," Starkweather said. "Secondly, the availability of high bandwidth networks and faster wireless data rates will create opportunities for mobile operators to offer more services, content and applications to their customers."

"We see software as having a critical role in enabling our partners to take advantage of these trends," he added.