PDA Market Makes Surprising Leap

Buoyed by a significant increase in the number of RIM Blackberry's, the PDA market is showing surprising growth, according to sales figures from research firm Gartner (NYSE: IT) . Gartner, which breaks the market into data-centric or voice-centric devices, said that worldwide data-centric PDA shipments increased 25 percent to 3.4 million in the first quarter of 2005.

"It's a little surprising, it's higher than I predicted," Todd Kort, principal analyst, Gartner, and co-author of the report, told TechNewsWorld. "I have to update my predictions because the first quarter was so strong. I'm probably going to have to raise my forecast. I think we're going to see 15 percent growth this year, which is pretty surprising considering that people were predicting the death of the PDA market."

RIM's No. 1

RIM took over as the market leader with a 20.8 percent share, up from 14.8 percent in the first quarter last year. PalmOne (Nasdaq: PALM) , which led last year with a 30.1 percent share, was down to 18 percent of the market.

Kort explained some of the growth by the changing nature of the devices themselves.

"The definition of PDA is changing year by year," he said. "They're becoming more and more powerful. I think the market was also affected by the economic slump."

Gartner's data differs from that of rival IDC because IDC defines PDAs only as devices that do not have wireless capability. Kort said that 55 percent of PDA sales in the first quarter had wireless capability.

More Growth Expected

He predicted that RIM will have another 12 months of unchallenged growth, partly because CRM and sales force automation vendors are beginning to develop applications that allow users to access those systems from their Blackberrys.

Microsoft (Nasdaq: MSFT) is working on developing a competing solution -- code-named -- Magneto, but Kort said that it will not affect RIM's market share for some time.

"Microsoft licensees will need MSN Exchange Server 2003 and Service Pack 2, so initially Microsoft will have low penetration. It will have a more gradual effect on market."

Palm's Treo will continue to fall farther behind, he added.

While Palm has added three or four new carriers per quarter in its efforts to expand its reach, RIM has been adding 25 in the same timeframe.