PC Sales Up, PDA Sales Down: Reports

In somewhat unexpected turn of events, two independent reports released Monday suggest sales of PCs and handheld devices are going in opposite directions.

Facing increasing pressure from the rapidly expanding mobile phone market, worldwide Personal Digital Assistant (PDA) shipments declined 0.2 percent in the third quarter of 2003, according to preliminary statistics released from Gartner .

The news came on the same day that high-tech research firm Interactive Data Corp. released a report indicating that seasonal and consumer demand moved the Personal Computer (PC) processor market up over the same period of time. This latter report indicates that Santa Clara, Calif.-based market leader Intel , for example, gained one percentage point of market share to climb to 82.6 percent, while Sunnyvale, Calif.-based Advanced Micro Devices Inc., lost 0.7 percent market share and ended the quarter with 16.5 percent.

The big news, however, was about PDAs, which after promising predictions in 2001 and the beginning of 2002, have struggled mightily for the last 20 months. According to the Gartner report, the third quarter of 2003 market the eighth consecutive quarter that the handheld market experienced a year-over-year decline in shipments. As Principal Analyst Todd Kort explained, the decline has been due to falling shipments based on non-mainstream operating systems.

“Approximately 70 percent of all PDAs are purchased by consumers with their own funds,” said Kort, who works in Gartner’s Computing Platforms Worldwide group. “Market erosion is also resulting from increasing competition from mobile phones that include similar calendar, address book, and other personal information management capabilities that have been fundamental applications of PDAs.”

Gartner’s research, entitled “Hewlett-Packard Surges Toward Top of Flat PDA Market in 3Q03,” indicated that the worldwide PDA market would have suffered a much steeper decline if not for strong growth by Hewlett-Packard . The Palo Alto, Calif.-based company is now second in the marketplace behind Milpitas, Calif.-based market leader palmOne , which makes the Palm device and saw its shipments decline 0.6 percent from this time a year ago.

Kort noted that HP’s worldwide PDA market share reached 23.1 percent in the third quarter of 2003, an all-time high for the company. He added that if the company’s results were removed from the PDA equation, the market would have declined by more than 13 percent overall.

Also of note in Kort’s research were statistics regarding Waterloo, Ontario-based Research in Motion Limited , which more than doubled shipments of its BlackBerry e-mail pagers from one year ago. Kort attributed the company’s success to a commitment to expanding international operations, and noted that despite an ongoing patent infringement lawsuit, the company also is benefiting from the new color BlackBerry 7200-series, which has spurred many BlackBerry customers to upgrade from their old monochrome models.

At IDC, which released the news about the PC processor market, research indicated that total market revenue increased 17.7 percent over the second quarter of 2003, due to rising microprocessor unit shipments and rising average selling prices. In the report, entitled, “Worldwide x86 PC Microprocessor Competitive Analysis 3Q03,” IDC researchers also noted that the momentum of both mobile and consumer desktop PC processors also accelerated in the third quarter, both by approximately 13 percent.

The numbers are certainly inline with recent analyst findings that cheaper prices, faster processors, Wi-Fi access and an anticipated major upgrade cycle in 2004 are all fueling the PC revolution.

No IDC analysts were immediately available for comment on the report by press time.

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