Makers of handheld gadgets thought small in 2006.

Mobile phones, computer mice, cameras and music players got tinier, but also louder, embracing bright colors and designer-label sophistication.

High-priced luxury gadgets hit a crescendo with Bang & Olufsen's $1,275 cell phone. Clothing makers found gizmos fetching this year, too. The purveyors of Italian couture known as Dolce & Gabbana rang up a glitzy D&G-branded cell phone, and dressmaking icon Diane von Furstenberg lent her name to a special edition T-Mobile Sidekick 3.

A decidedly unglamorous war, of sorts, began in the consumer electronics realm, though no blood has been shed (yet). Two camps aimed to usurp DVD's crown as the standard disc format for home theater: HD DVD and Blu-ray. Both consortiums released their first players to the market and slowly offered titles to go along with them. Both also shrugged off the notion that their competitive face-off constituted a "format war." Consumers declined to choose sides, and sales forecasts for the year were lowered from 750,000 to 250,000 players. NEC came with a peace offering, an idea for a chip that would enable production of a dual-format player.

Nokia retained its status as the No. 1 cell phone maker, followed by Motorola, Samsung, Sony Ericsson and LG Electronics. Mobile-phone manufacturers expect to ship their billionth phone by the close of 2006.

Motorola's popular Razr flip phone spawned some vowel-challenged offspring in new hues.

Smart phones had an up-and-down year: Research In Motion's popular BlackBerry was saved by an out-of-court settlement when RIM agreed to pay $612.5 million to patent firm NTP.

Palm celebrated the 10th anniversary of its original Pilot PDA. Later in the year, the Sunnyvale, Calif.-based company introduced the more colorful and consumer-oriented Treo 680 smart phone.

Motorola played smart with its new QWERTY phone, dubbed the "Q", while RIM introduced its own consumer model, the BlackBerry Pearl. T-Mobile joined the party by branding the Dash smart phone, and Samsung bet on the BlackJack.

Apple Computer's feverishly popular music players made noise in September, with news of new iPod Nanos, and a redesigned Shuffle.

U2 front man/world conscience Bono branded the color red and slathered it all over a gaggle of gadgets, from Motorola's Razr and Slvr phones to the 4GB and 8GB iPod Nano, as part of his (Product) RED AIDS charity.

TiVo made a big move and went high-def, but still ended the year on a relatively sour note: the company is still losing money.

In November, Palm got bad news when it was slapped with a patent-infringement lawsuit by NTP, the same firm that went after the BlackBerry.

Late in the year, Microsoft rolled out the Zune, its purported iPod challenger. The music player from Redmond saw strong sales in its first week but since then has dipped in the rankings--with Microsoft now considering an advertising boost to draw more attention to the product.

Personal GPS (Global Positioning System) devices finally made their way into the mainstream. In 2006, half of the GPS devices sold went for less than $500, significantly less than they sold for a year earlier.

And the blogosphere was abuzz for much of the year with gossip and speculation about a supposed "iPhone" from Apple. As it turned out, an iPhone did debut--but from the decidely less glamourous Cisco. Will Apple fans' dreams come to fruition in '07, albeit with a different product name? Stay tuned.

--Erica Ogg

2006 Highlights

Photos: Gaggles of gadgets at CES

Even with half a week to look around, attendees were hard-pressed to see everything on display.

Blu-ray, HD DVD players: Clunky, unimpressive

At CES, the Blu-ray and HD DVD players on display were reminiscent of VCRs and CD players from earlier eras.

Bye-bye, BlackBerry?

A federal court hearing inspires fevered thumb-typists to ponder life without mobile e-mail.

Photos: Asus' luxury laptops

Notebook maker Asus is wrapping laptops in carbon fiber, aluminum, leather and Lamborghini.

BlackBerry saved

BlackBerry users can take deep breath. RIM, NTP reach $612.5 million settlement to skirt service injunction.

On edge about Razr phones

News of a glitch, and a halt in sales, had bloggers both defending the popular device and ripping it as "junk."

Photos: 10 years of Palm handhelds

It's been a decade since Palm launched its first handhelds. Check out the changes in its PDAs over time.

Photos: Cell phones for the rich and famous

Nokia's Vertu cell phones are not for the budget-minded, with prices from $4,900 to $88,300 for a diamond-encrusted model.

Zune could kill Microsoft partners, not iPod

Bloggers' first reaction to the official word from Redmond on the upcoming music player: Partners will become competitors.

Photos: Motorola's Razr offspring

Hoping to capitalize on popularity of its Razr cell phone, Motorola unveils several new models based on its design.

Photos: RIM's BlackBerry Pearl

Research In Motion's first multimedia phone for consumers features a camera, music player and e-mail functionality.

Cell phone shipments hit highs, but profits sag

With the billionth handset expected to ship this year, makers are hitting sales records. But some are struggling to make money.

Microsoft sings a new Zune

Will the Zune emerge as one of the cool kids in the fast-growing portable media player crowd? Or is that just a rock 'n roll fantasy for Microsoft?