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From...

Pilot holds lead in hot handheld market

The Palm Pilot   

October 29, 1998
Web posted at: 3:30 PM EDT

by James Niccolai

(IDG) -- The market for smart handheld devices is booming, but with scads of product designs to choose from and new smart phones on the horizon, vendors will have to work hard to keep consumers interested in their products, according to a report released today by International Data Corporation.

The handheld devices market is set to rocket to almost 11 million units in 1999, up about 45 percent from projected sales of 7.4 million units in 1998, IDC said. The category includes keyboard-based handheld computers, PC companions like 3Com's Palm Pilot, smart phones, and other devices.

The Palm Pilot is still the most popular PC companion and will remain that way until more top-tier vendors throw their weight behind Microsoft's competing palm-size PC design, IDC said. The Pilot captured about 41 percent of the worldwide handheld companion market in the first half of this year, up from about a third in 1997, according to IDC.

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Jupiter devices based on Microsoft's H/PC Pro Edition of Windows CE won't make much of an impact this year, IDC concluded in a separate bulletin released Wednesday. But 1999 will see corporate users begin to test the subnotebook-type systems, which eventually will be the dominant form factor among Windows CE keyboard-based PC companions, according to Diana Hwang, IDC's research manager for smart handheld devices.

"They will eventually offer corporate IT a lower cost of ownership, and will become the secondary device of choice for many desktop users," Hwang said.

About 300,000 Jupiter-type devices are expected to ship worldwide in 1999, Hwang predicted. They won't serve as desktop or notebook replacements, but will fill a need for mobility at a lower cost than notebooks, she said.

Smart phones haven't lived up to their expectations so far, thanks to the high cost of the devices, product delays, and wireless infrastructure issues in the U.S., IDC said. New devices on the way could help change that, and provide added competition for other handheld device categories.

Other findings indicate that the PC companion market performed under expectations in 1997 due to cannibalization of Windows CE 1.0 devices by the anticipated arrival of Windows CE 2.0-based systems.

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