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Smartphones outsell PDAs 2:1

Q4 good for PDA makers, even better for Nokia

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Q4 2003 may have been a boom time for the European PDA market, but it was an even bigger period for smartphones. According to new figures from market researcher Canalys, 2.24 million smartphones shipped in Europe, the Middle East and Africa during the quarter, compared to 1.23 million PDAs.

Like IDC before it, Canalys' numbers put Palm in second place behind HP in the PDA market, and ranks them three and two in the overall handheld device market, respectively. Ahead of both sits Nokia, which shipped 1.74 million devices last quarter to HP's 406,420 and Palm's 307,100.

The three companies achieved market shares of 50.2 per cent, 11.7 per cent and 8.8 per cent, respectively. Compared to Q4 2002, those shares represent a big gain for Nokia, a small rise for HP but a disappointing dip - unit shipments were down 19 per cent year on year - for Palm. Canalys' Q4 2002 numbers give Nokia 42.4 per cent of the market, Palm 23.8 per cent and HP 9.5 per cent.

Palm's decline comes despite a 56 per cent increase in the number of units shipped in Q4 2003 over the same period the year before.

HP and Palm were the only PDA specialists to make Canalys' top five device makers' table: they were followed by smartphone vendors Sony Ericsson (216,990 units shipped for a 6.2 per cent share) and Motorola (142,200, 4.1 per cent). All the others took 18.9 per cent of the 3.47 million devices shipped during the quarter.

Canalys agrees with IDC's conclusion that bundle deals, particularly of GPS kit, helped boost the sales of PDAs during the Christmas quarter. Indeed, navigation solutions are becoming de rigueur: "Vendors without navigation bundles will find it harder to get shelf space - Palm and Sony have some catching up to do in this area," warned Canalys senior analyst and director Chris Jones.

"In some countries - Germany being a prime example - major retailers are now insisting on navigation solutions in preference to standalone handhelds," he added. "It will become more and more difficult to sell such devices purely on the basis of personal information management."

Canalys also pointed to renewed enterprise spending - which has favoured HP, in particular - but reckons it won't be long before smartphone vendors start winning corporate business over PDAs. Nokia certainly has its eye on the market, as its 6600 handset shows, as does Sony Ericsson with the much-improved P900. Nokia dominates the smartphone sector, with a 77.9 per cent market share.

Both handsets are based on the Symbian OS, which accounted for over two million of the smartphones shipped in the region last quarter, Canalys' numbers show - pretty much all of them, in other words.

"The Symbian OS is now reaching the shipment levels needed to make it a contender in the enterprise," said analyst Rachel Lashford. ®

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