PDA sales soar in 2000

January 26, 2001: 5:12 p.m. ET

As PCs floundered, consumers snapped up handheld devices

NEW YORK (CNNfn) - In 2000, personal computer vendors slogged through one of their most difficult years in recent memory; but at the same time, the market for handheld computing devices exploded.

Sales of handheld computers, sometimes referred to as portable digital assistants, or PDAs, more than doubled last year, according to a report from market research firm NPD Intellect.

By NPD Intellect's count, handheld sales totaled about $1.03 billion last year, a 136 percent increase over $436.5 million in 1999.

Palm Inc. (PALM: Research, Estimates), whose "Pilot" devices first hit the market about six years ago and have grown in popularity ever since, held its position as the leading supplier of handheld computers. But the emergence of Handspring Inc. (HAND: Research, Estimates), whose "Visor" brand handhelds use the same operating system as the Palm's, as well as the introduction of Microsoft-based "PocketPCs" from several vendors narrowed the gap.

During 2000, Palm took 72.1 percent of the handheld pie, compared with its 77.5 percent market share in 1999. Handspring, which did not show up in the rankings in 1999, took a respectable 13.9 percent.

Meanwhile, Compaq Computer Corp. (CPQ: Research, Estimates), the world's largest PC supplier, joined the handheld fray as well.

Compaq, was one of three vendors offering PocketPCs, the term used to describe computers powered by Microsoft's newest version of its handheld computing operating system. The company snatched 2 percent of the market in 2000, according to NPD Intellect's data.

Launched in late April, the PocketPC platform is a much improved and simplified version of Microsoft's Windows CE operating system, previous incarnations of which had been derided as nothing more than a slimmed down version of its desktop OS and not conducive to the handheld environment.

Other vendors offering PocketPC devices in 2000 included Hewlett-Packard (HWP: Research, Estimates), which took 2.3 percent of the market share, and Casio, which garnered 6 percent.

Together, handheld computer makers shipped more than 3.5 million units in 2000, a more than 169 percent increase over 1.3 million in 1999, NPD Intellect said.

That growth stands in stark contrast to the growth rate in the PC market in 2000.

In all of 2000, PC makers shipped 134.8 million units in 200, a 14.5 percent annual increase and sharply below the 23.3 percent unit shipment growth the PC industry logged in 1999, according to preliminary figures released by technology research firm Gartner Dataquest last week.