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Palm still very strong in US retail arena

But Sony is closing in fast

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The Palm OS continues to command the lion's share of the PDA market, at least as far as the US retail sector goes. The platform accounted for 82.5 per cent of the handhelds sold online and in stores during August, while PocketPC took 13 per cent of the market, according to the latest numbers from NPD Intelect.

Overall, the retail PDA market grew 10.4 per cent during August, the company reports. Not a bad sign, that, given the state of the economy, but in August, consumer spending was still high, thanks to falling interest rates and Dubya's tax rebate.

With US consumer spending falling 2.4 per cent last month, in the wake of the events of 11 September, don't expect that level of growth to continue.

Palm's lead was maintained in August, but its overall marketshare fell, gobbled up by the rising star of the PDA market, Sony. Palm took 51.2 per cent of the market, based on the number of machines it sold. Handspring came second with 19.5 per cent and Sony third with 10.4 per cent.

This time last year Sony had zero marketshare. Handspring has grown just a few percentage points during the same period, so it needs to watch Sony's rise probably more than Palm does.

Indeed, with brandname proving the biggest draw for consumers during August, Sony is in a very good position to grow its marketshare over the coming quarters, possibly even eclipsing Palm itself.

Around 31 per cent of the buyers NPD Intelect surveyed said they'd chosen which PDA to buy on the basis of its brand. Possessing the latest technology and the features offered, drove just 19.5 per cent and 12.9 per cent of buyers, respectively. Only ten per cent were primarily driven by cost - good news (again) for Sony, whose PDAs are among the more expensive.

Meanwhile, PocketPC players Compaq and Casio both accounted for 8.3 per cent of the market and 4.3 per cent, respectively, showing the success of the iPaq - in the retail space at least - is, like Sony, coming at the expense of rival Windows CE players rather than rival platforms.

However, the relatively high price of the iPaq - plus the price-fighting in the Palm OS arena - drove down Palm OS' share of the market by value to 78.4 per cent. The average price of a Palm device fell 12 per cent, to $242. Handsprings typically went for $197 and Sonys $275. The average Compaq cost $418. ®

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