PalmPilot heads handheld sector

The worldwide market for handheld computers grew by 65 percent in 1997 as 3Com's PalmPilot fended off an attack from Windows CE-based devices for another year, a new study revealed today.

Handhelds come either as small pen-based devices like the PalmPilot or as small portable PCs with a keyboard, such as the Windows CE handhelds and the slightly larger, more expensive ultraportable Windows 95 notebooks like Toshiba's Libretto.

Also, a wave of PalmPilot-like devices are just now beginning to hit the market based on Microsoft's Windows CE operating system.

To date, the market for handheld computers largely has been driven by individual professionals in the retail sector. In the future, a Dataquest study found, as paging and Internet features on the devices become more sophisticated, corporate sales will make up more of the overall market.

"Business professionals today realize this is a viable, easy-to-use alternative," noted Dataquest senior analyst Mike McGuire. "We're seeing more interest from corporations, who may not be buying in big numbers yet. This will stick over time, because it's a way for business professionals to carry important data that can be backed up."

The PalmPilot accounted for more than 63 percent of the handheld market in 1997, up from 51.7 in 1996, according to the study. Over 1 million units of the popular 3Com handheld were shipped last year alone.

"Now that the Windows CE products have showed up, this is the time when the 3Com marketing teams will have to go out and work harder," said McGuire. "This is their first real challenge."

Indeed, the market for handheld computing devices exploded last year in terms of product offerings. Although Apple has discontinued its Newton line, Windows CE devices from Hewlett-Packard, Casio, and Philips picked up the slack, accounting for 26 percent of standard handheld shipments.

Among Windows CE devices, HP was No. 1, with 43 percent market share, followed by Casio with 17 percent, and Philips with 16 percent. Palm-sized devices, which only recently began shipping, were not counted in the study.