RIM stays atop PDA market despite slow sales

Research in Motion held onto its spot as the world's largest PDA (personal digital assistant) vendor, thanks to swelling demand for wireless e-mail, according to a market report released Tuesday.

RIM shipped more than 1.8 million BlackBerry handhelds in the fourth quarter, pushing its total 2006 PDA shipments up 10 percent over last year to 3.5 million, according to Gartner.

Despite its success, RIM's shipments grew more slowly than the overall market rate of 18.4 percent, and much slower than smaller competitors like Mio Technology, up 112.1 percent on sales of its global positioning system-enabled devices, and Sharp, up 166.2 percent on sales of its Sidekick. The biggest losers in the industry were Palm, whose PDA shipments dropped 29 percent, and Hewlett-Packard, which dropped 24.1 percent.

RIM still dominates the industry with 19.8 percent market share, but the other four vendors are now locked in a tight race, all claiming shipments between 1.4 million and 1.9 million units. Palm ranks second with 11.1 percent share, followed by HP with 9.7 percent, Mio with 8.5 percent and Sharp with 8 percent.

One reason for the shift is that RIM has been migrating its product mix from PDAs to smartphones, lead by the success of its BlackBerry Pearl, Gartner analyst Todd Kort said in the report. That trend applies to the entire market, too, as PDA vendors included cellular connectivity in 60 percent of their products in 2006, up from 47 percent in 2005.

Gartner defines a PDA as a data-centric device that may offer voice communication but focuses on features like instant on/off and synchronizing files with a PC. The segment includes cellular PDAs such as RIM's BlackBerry 87xx, but excludes smartphones such as the BlackBerry 81xx and Palm Inc.'s Treo 750.

Inside those PDAs, Microsoft's Windows CE was both the most popular OS and the fastest growing. Designers used Windows CE in 56.1 percent of all PDAs in 2006, an increase of 38.8 percent from 2005. RIM's OS held a distant second place with 19.8 percent of the market, while the Palm OS lost nearly one-third of its platforms and held onto just 11.7 percent share. At the bottom of the market, fourth-place Symbian slumped to 5.4 percent share, and Linux rose to 0.9 percent.

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