Zire Stands Out in Sluggish PDA Stats

On the heels of research data that showed a 12.2 percent drop in its global shipments of PDA’s last year, stats for Palm’s new low-priced Zire for consumers are shining in a cloudy outlook for overall sales.

The handheld computer maker’s $99 model, introduced in October of 2002, was among the best-selling PDA in U.S. channels during the fourth quarter of 2002, according to market information firm NPD Group.

The firm said the Zire handheld accounted for 13 percent of Palm’s unit sales during the fourth quarter. In addition, NPD Group said the Palm Zire handheld had the highest sales figures during its three months after introduction, with more than 228,000 Palm Zire handhelds sold during the important holiday selling period.

But overall, the PDA industry had a difficult year as worldwide shipments of PDAs fell to 12.1 million units in 2002, a 9.1 percent decline from 2001 results, according to Dataquest, a unit of Gartner .

In addition, Palm’s worldwide PDA shipments declined 12.2 percent in 2002, Gartner said, even though it shipped more than twice as many units as its nearest competitor.

The main reason for the slowdown, Gartner said, was slow adoption of PDAs by enterprises, whose budgets are under pressure to cut back.

“We estimate that about 70 percent of all PDAs are purchased by consumers and only 30 percent by enterprises,” said Todd Kort, principal analyst for Gartner Dataquest’s Computing Platforms Worldwide group.

“The more lucrative enterprise market has been stagnant because of poor economic conditions and a perception that PDAs are not yet capable of delivering sufficient return on investment. The enterprise market is still another year away from embracing PDAs.”

Palm said more than 90 percent of consumers who bought Zire handhelds are new handheld purchasers, just the customer it’s looking for with a scaled-down PDA model that it sees as a starter-kit leading to higher-performance upgrades with its owners.

Gartner also noted that in the PDA operating system market, Palm OS shipments totaled 6.7 million units, which represented 55.2 percent of worldwide shipments in 2002. It said Windows CE totaled 3.1 million units, which accounted for 25.7 percent of all PDA units.

In addition, the wireless PDA sector is still young, which means companies are waiting on purchasing these devices, Gartner said.

“End users still have too many hassles getting wireless devices properly configured. On top of this, wireless data speeds are typically much less than advertised, and costs per megabyte are relatively high, especially in the United States,” Kort said.

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