PalmOne beats HP in smart handheld space

PalmOne has trumped HP as the dominant vendor in the smart hand devices (SHD) space. Based on IDC second quarter market results, the vendor has grown a 13.5 per cent market share in Q1 2004 to 23.1 per cent in Q2 2004.

HP, by comparison, suffered significantly against the rest of the market, slipping from a 35.6 per cent share in Q1 to 18.9 per cent in Q2. IDC associate analyst, Mercie Clement, attributed the results to a major effort by PalmOne to grow its market share, rather than a failing on HP's part.

"PalmOne had a good quarter resulting from its aggressive pricing strategy as well as its successful bundling promotions it ran over the course of the quarter," she said. "Plus, it did especially well through its retail channels.

"HP has expanded its offering with the launch of two new models recently, so it will be interesting to watch these two vendors over the coming quarter."

Nokia remained steady in third position with 15.5 per cent of the market. O2 proved to be the quarter's star performer, jumping into fourth.

"With the inclusion of its products with all three major carriers - Telstra, Vodafone and Optus, O2 gained traction in the quarter," Clement said. Motorola rounded out the top five, recording 8.1 per cent market share in Q2.

The second quarter proved to be a profitable for the overall smart hand devices market, with the segment growing some 21.5 per cent in unit shipment terms against Q1.

This result was off the back of strong converged devices (smart phones) growth, Clement said. The sector grew 54.3 per cent on the previous quarter, with strong results in the datacentric category.

By contrast, pen-based handheld SHDs sales declined by 1.7 per cent when compared to Q1 2004, Clement said.

"The handheld [which includes pen-based SHDs] space in Australia [which includes pen-based SHDs] is very mature and is expected to be increasingly cannibalised by converged devices," she said. "While we expect individual end-users in the consumer space to continue buying the basic handheld SHDs, business users will increasingly adopt the converged form factor, largely due to the uptake of the enterprise mobility movement."

The SHD market would continue to grow over the next quarter, according to Clement, fuelled by vendors in new product offerings across both the pen-based and converged categories.

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