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Handheld market contracts

Worldwide handheld shipments dipped more than 2 percent in the third quarter compared with the same period last year, according to a revised report from Dataquest.

Worldwide handheld shipments dipped more than 2 percent in the third quarter compared with the same period last year, according to a revised report from Dataquest.

Globally, 2.55 million personal digital assistants (PDAs) shipped in the third quarter, down from 2.62 million in the year-ago quarter. That continues the decline seen in the second quarter.

Dataquest released a revised report Thursday after stating earlier this week that worldwide shipments were up 0.9 percent. The market researcher attributed the change to revised data from Hewlett-Packard.

Palm continued to lead the market with 30.6 percent of the global market in the third quarter, up from 28.8 percent a year ago.

Sony jumped into the No. 2 position ahead of HP. Sony grabbed 13 percent of the market in the third quarter, up from 3.5 percent a year ago.

HP, meanwhile, saw its share of the worldwide market drop from 12.1 percent to 11.5 percent.

"Sony has been averaging about one new model launched every month of 2002," Dataquest analyst Todd Kort said in a release.

Dataquest also revised its U.S. figures. Earlier this week, Dataquest said the U.S. handheld market had grown 4.5 percent in the third quarter from a year ago. But Thursday, the market researcher said the U.S. market had actually slid 1.4 percent, with shipments falling to 1.2 million units.

Sony also leapfrogged HP in the U.S. market, where it has 19.8 percent of the market, up from 4.1 percent a year ago. HP's U.S. share dropped to 9.7 percent from 12.2 percent a year ago.

Palm's lead was stronger in the United States, where it has 41.7 percent of the market compared with 39 percent a year ago. The big loser in the U.S. market was Handspring, which saw its 22.5 percent market share from a year ago drop to 6.6 percent.

Handspring, Sony and Palm devices all use the Palm operating system. Handhelds using Microsoft's Pocket PC operating system, which include HP's devices, continue to see their presence grow in the worldwide market. Microsoft licensees now account for 28.8 percent of worldwide shipments, according to Dataquest.

"After a slow but steady decline, the Palm OS market share appears to have stabilized, but new challenges are on the horizon," Kort said. "Much more competitive pricing from Pocket PC vendors, beginning in the fourth quarter of 2002, will undoubtedly stimulate growth in Pocket PC shipments and allow Palm less breathing room."

Kort said that Dell Computer's entry into the market could intensify the battle. Dell plans to launch a PDA in the United States soon.