HP lost ground in the second quarter, but its shipments increased 87 percent in the third quarter, to 201,060 units, compared with the same period a year ago. That gave it 31.1 percent of the European handheld market. Palm's shipment growth was relatively steady at 8 percent, to 186,100 units, giving it 28.8 percent of the market. Both companies were helped along by the introduction of new devices.
A year ago, Palm held the top market share spot, ahead of its nearest competitor by more than 10 percentage points.
The European market is much smaller than the U.S. market but is growing faster partly because of that smaller base. Shipments in the United States continued a, dipping 10.7 percent compared with the same period a year ago, according to research firm IDC. Shipments in the United States totaled 2.27 million units in the second quarter, IDC said.
Analysts have attributed the steady decline to a lack of innovation, which is limiting the reach of the devices and restricting growth beyond the enthusiast crowd to which handhelds currently cater. The holidays are not expected to be as significant in terms of boosting shipments as they traditionally have been, but new products may still stir the market.
A Canalys analyst pointed out that the fourth quarter is generally strong for Palm.
"Palm usually performs well in Q4," Rachel Lashford, a Canalys analyst, said in a release. "So, HP should not take this leadership position for granted...There will also be several new smart phone and handheld launches in the run up to Christmas, which will all make for an exciting quarter in terms of potential shifts in market share."