Report: Windows CE top PDA OS in 2004

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Feb. 15, 2005

Windows CE pushed ahead of PalmOS to become the top OS shipped in PDAs worldwide in 2004, according to preliminary data released this week by Gartner. Microsoft's embedded OS accounted for 43 percent of 2004 PDA shipments (up from 37.7 percent in 2003), while PalmOS plummeted to 36.3 percent (from 50 percent in 2003). Additionally, Gartner reports that 2004 PDA shipments gained 6.6 over 2003, in contrast to recent IDC data reporting a 13 percent decline.

Commenting on Microsoft's strong performance, Gartner principal analyst Todd Kort said, "Microsoft-based PDAs have gained favor mostly due to their affinity with the Windows PC market and Microsoft's ability to attract more than 30 licensees around the globe."

Another noteworthy observation is a continued growth in PDA average selling prices (ASPs). According to Gartner, ASPs grew to $353 in the fourth quarter of 2004, up 9.4 percent from 2003, a trend which pushed 2004 PDA revenue up 16.7 percent over that of the previous year, to a record $4.3 billion.

"The PDA market has shifted from unconnected organizers overwhelmingly purchased by consumers to a market in which 44 percent of the devices shipped in 2004 offered integrated wireless area network (WAN) and/or wireless LAN (WLAN) connectivity," explained Kort. "Wireless PDAs generally have higher ASPs, driving the market to record revenue. Another factor for the increased revenue is that nearly half of all PDAs are now purchased, or reimbursed, by enterprises."

The difference in overall trend data between Gartner and IDC may be attributable to differences in how the two research firms define "PDA." In IDC's research, PDAs, which it calls "handhelds," are defined as "pocket-sized, either pen or keypad-centric, devices that are designed to access and manage data including office documents, multimedia, and games, and that feature 'evolved' operating systems and application environments such as Windows Mobile, Palm OS, Linux, or other proprietary platforms with the ability to download, run applications, and store user data beyond their required PIM capabilities." In IDC's definition of handhelds, the devices do not include telephony, but may include wireless capabilities that enable Internet access and text communication. In IDC's finding, the decline was attributed to the "search for relevance that handheld device vendors are facing in today's marketplace." Vendors have had some success with bundled and integrated GPS receivers, but the lack of other compelling solutions continues to limit their ability to expand into new market segments, IDC said.

Additional information on the latest Gartner data is available in a Gartner Alert entitled "RIM Sparked PDA Market to Grow 6.6 Percent in 2004."

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