IDC: Pilot still leads in hot handheld market

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 by IDC. The market for smart handheld devices is set to rocket to almost 11 million units in 1999, up about 45% from projected sales of 7.4 million units in 1998, IDC says

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 by International Data (IDC).

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

3Com's 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% of the worldwide handheld companion market in the first half of this year, up from about a third in 1997, IDC said.

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 today. 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 US, IDC said. New devices on the way could help change that, and provide added competition for other handheld device categories, IDC said.

Other findings indicate that the PC companion market performed under expectations in 1997 due to cannibalisation of Windows CE 1.0 devices by the anticipated arrival of Windows CE 2.0-based systems. And the vertical application device industry continues to show steady growth as market consolidation settles down, IDC said.

The reports "It's a Small, Small World: Worldwide Smart Handheld Devices Market Review and Forecast, 1998-2002," and "Jupiter: Not for Many Moons" are available for purchase by contacting IDC in Framingham, Massachusetts, at +1-508-872-8500, or on the Web at http://www.idc.com/.

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