Nokia leads smartphone vendors in 2006, PDA sales dive

Nokia continued to beat its competitors as smartphones sold four times faster than PDAs in the second half of 2006, Gartner said

Handheld PC vendors sold four times as many smartphones as PDAs (personal digital assistants) in the second half of 2006, and Nokia continued to distance itself from competitors.

Nokia owns 42 percent of the combined PDA and smartphone market, compared to single-digit market share for Research in Motion (RIM), Motorola and Palm, according to a study released by Gartner.

Worldwide, that market reached 42.1 million units, a 57 percent rise from the same period last year. Most of the growth was driven by sales of smartphones, which rose 75.5 percent to 34.7 million units. In contrast, PDAs grew very slowly, climbing only 5.7 percent to 7.4 million units.

Nokia could add to its lead in the second half of 2006 as it launches new models of smartphones, said Roberta Cozza, principal research analyst for Gartner.

Among the smaller vendors, Motorola doubled its sales of smartphones, thanks to the popularity of its Linux-based units in Chinese markets. But RIM is set to post stronger future growth with its Pearl device, as demand for mobile e-mail spreads beyond executive users, Gartner said.

At the bottom of the pile, Palm saw its sales sink 26 percent, leaving it with only 5 percent of the combined worldwide market for PDAs and smartphones. In fact, the company has launched no new PDA models to date in 2006.

Coincidentally, IDC also released figures last week for the Australian smart handheld device market.

IDC figures show Nokia maintained its supremacy with 77.8 percent share, with RIM in second spot with 5.7 percent. i -mate, which expanded its shipments by 18 percent sequentially compared to the first quarter of 2006, holds the third place with 5.3 percent share. HP and O2, with 4.6 percent and 2.9 market share respectively make up the top five.

Although traditionally voice centric in its mobile devices, Nokia in Q2 entered the data-centric market with the launch of its e61 model. Powered by the Symbian S60 operating system, it is challenging the Treo and Blackberry for market share.

Still life in PDAs?

PDAs aren't dead yet -- they outsold smartphones in North America in the first half of 2006. But smartphones ruled in every other region, including an enormous 33 percent worldwide share sold in Japan alone.

To continue this hot pace of growth, vendors must convince buyers that new smartphones offer more benefits than less-expensive enhanced cell phones, Cozza said. To make that case, they will launch new products with advanced features and rich multimedia functions, she said. If they succeed, smartphone shipments could reach 81 million by the end of the year.

However, IDC figures showed that PDA or pen-based devices accounted for only 5 percent of the entire Australian smart handheld device market.

(Additional reporting by Howard Dahdah.)

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