RealTime IT News

Study: Palm OS Dominates Retail

Sales of handhelds have slowed significantly, but they're still growing slowly and devices based on the Palm OS still dominate in the retail channel, according to a new market study by NPD Intelect.

Overall unit sales of handhelds grew by 11.9 percent in August, according to the study. It appears, however, that handheld vendors bought this sales increase by significantly lowering their prices. In addition, the new study shows that Palm-branded handhelds are continuing to lose ground even as other devices based on the operating system remain highly popular.

The figures, which cover August retail sales of handhelds, show that Palm's market share was 51.2 percent, a 16.7 percent decrease over the same month last year. Handspring, however, increased its market share by 14.9 percent to an overall share of 19.5 percent, according to the study.

In third place was another Palm OS-based handheld, the Sony CLIE, a relative newcomer that had 10.4 percent of the market. That gives Palm OS-based devices 81.1 percent of the market share in the retail channel.

In fourth place was Compaq, which has an 8.3 percent retail market share according to the study for its Pocket PC-based handhelds, an increase of 28.5 percent over the previous year. Trailing behind Compaq is another Pocket PC manufacturer, Casio, which has a 4.3 percent share.

The NPD Intelect market share study records only units sold in retail. Compaq, however, has significant direct sales to enterprises that wouldn't show up in this particular market study. Other studies have indicated Compaq's total handheld market share is likely to be approaching 30 percent.

Perhaps indicating a major barrier in the retail market, Compaq's $418 average selling price in August, 2001 was significantly higher than that of the Palm OS-based handheld. Handspring had a $194 average selling price, Palm had a $242 average selling price and Sony's was $275.

All three vendors, however, saw their average selling price decrease. Palm's average selling price decreased 12 percent compared to the same month a year ago while Handspring and Compaq saw their prices decrease by 15.7 percent.

"Unit growth appears to be driven by substantial price reductions taken by both Compaq and Handspring, and not by seasonal factors," said Stephen Baker, senior hardware analyst for NPD Intelect.