According to market researcher Canalys, Palm shipped more than 347,000 units in the first quarter, up 38 percent from the same period last year. However, that increase lagged the overall market, which nearly doubled during the same period. As a result, Palm's market share slipped to 41.3 percent for the first quarter, down from 52.1 percent a year ago.
Meanwhile, Compaq Computer saw its shipments rise to 100,000 units in the first quarter, compared with 9,000 in the same period last year--enough to give Compaq nearly 12 percent market share, up from a 2 percent share a year ago.
Casio had the third largest share, at 9.5 percent with nearly 80,000 units shipped in the first quarter. The report, which also includes smart phones, ranked Nokia as fourth. In the first quarter, the company shipped more than 78,000 advanced phones that incorporate some organizing functions found in handhelds.
Psion, the leading European handheld maker, saw its shipments drop by 5 percent from the first quarter of 2000, to just shy of 75,000 units. Consequently, Psion's market share fell from 19.1 percent a year ago to 8.9 percent in this year's first quarter.
Handspring came in sixth, with 7.2 percent of the market, followed by Ericsson at 4.6 percent, Hewlett-Packard at 4.1 percent and IBM at 2.2 percent. Other makers accounted for the remaining 1 percent of the market.
Canalys predicts that the convergence of cell phones and handhelds is going to intensify.
"Any mobile handset or handheld manufacturer who thinks these will stay separate markets is in for a big surprise over the coming months," Canalys senior analyst Chris Jones said in the report. "With the arrival of wireless handhelds and smart phones over the next couple of quarters, these services will be competing head-on in a single mobile device market."
Palm has said it is working on a handheld with built-in wireless capabilities for the European market, while Research In Motion is set to launch its BlackBerry two-way e-mail pager in Europe in partnership with BT Cellnet. Sagem has announced it will offer a Pocket PC-based handheld that can also act as a cell phone, while Nokia and other cell phone makers are upgrading their high-end smart phones.
The study also noted an increase of color-screen devices, which now account for 19 percent of the market, compared with 10 percent in the first quarter of 2000.
Palm's operating system remained the leader, with 50.7 percent of the market, but Microsoft's Pocket PC operating system placed second at 19.6 percent, overtaking Symbian's EPOC operating system, which garnered 13.5 percent.
Another survey, released in March by market researcher Context, also noted a significant gain for Pocket PC-based handhelds in Europe.