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But 2004 will be challenging year - analyst

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PalmOne may no longer be Europe's number one PDA maker, but globally it managed to hold off HP, full-year figures from Gartner reveal.

But a 19 per cent decline in shipments saw the company's performance fail to keep up with the industry as a whole. Some 11.5 million PDAs shipped last year, Gartner said - 5.3 per cent fewer than in 2002.

By contrast, HP's shipments grew 40.3 per cent to 2.28 million units, yielding a market share of 19.9 per cent, up from 13.4 per cent in 2002. PalmOne's 2003 share was 36.4 per cent, down from 42.5 per cent the previous year.

Dell - number five in the chart - experienced the highest growth: 656.5 per cent, as unit shipments grew from 77,000 to 582,500, propelling its market share from 0.6 per cent in 2002 to 5.1 per cent last year.

Blackberry creator Lawsuits in Motion - sorry, Research in Motion - also experienced three-figure growth: 121.4 per cent, taking its market share from 2.3 per cent to 5.3 per cent. RIM was placed fourth in the chart behind Sony, at number three. The Japanese giant grew shipments by a modest 5.5 per cent. It took 12.2 per cent of the market.

PalmOne's decline was exceeded by other vendors. Toshiba's shipments fell 22.2 per cent year on year. Together, all other vendors' shipments dropped by 35 per cent.

In the US, all six vendors retained their global rankings. Over half the PDAs sold ship in the US market, which declined two per cent last year. Shipments in Western Europe fell 12 per cent, and 30 per cent in Asia-Pacific. The weakening dollar and its upward effect on US prices, however, may yield a deeper decline in the US market in 2004, Gartner said.

HP's success was driven by an "aggressive" roll-out across all key price points. However, demand is moving toward the mid- to low-end of the market. Certainly that's were the majority of players did best during the last three months of 2003.

The trouble is, that's where smartphone manufacturers are at their most competitive, and will bite into PDA vendors' low-end sales throughout 2004, Gartner warned. PalmOne and other Palm OS vendors will be hit hardest, it reckons, because their users are typically those who make most use of their devices' PIM features.

HP and other PocketPC vendors will be relatively safe because their devices are favoured more as a host for enterprise applications. However, come 2005, and the smartphone vendors will begin eating into that sector too, the researcher forecast. ®

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