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Led by strong growth by Research In Motion's (RIM) BlackBerry, worldwide handheld shipments increased 6.6 percent in 2004, according to preliminary results by market researcher Gartner.

It isn't just the numbers of handhelds being shipped that are increasing, the average selling price (ASP) is going up as well. Worldwide revenue during last year set a new record: $4.3 billion. This is a 16.7 percent increase from the year before.

"The PDA market has shifted from unconnected organizers overwhelmingly purchased by consumers to a market in which 44 percent of the devices shipped in 2004 offered integrated wireless area network (WAN) and/or wireless LAN (WLAN) connectivity," said Todd Kort, principal analyst in Gartner's Computing Platforms Worldwide group. "Wireless PDAs generally have higher ASPs, driving the market to record revenue. Another factor for the increased revenue is that nearly half of all PDAs are now purchased, or reimbursed, by enterprises."

Windows Mobile Officially Takes the Lead

In 2003, Windows Mobile accounted for 37.7 percent of the worldwide handheld market. In 2004, that number jumped up to 43 percent, and Windows Mobile became the world's leading operating system for handhelds.

Palm OS has slipped from being the operating system on 50 percent of handhelds shipped in 2003 to 36.3 percent last year.

"Microsoft-based PDAs have gained favor mostly due to their affinity with the Windows PC market and Microsoft's ability to attract more than 30 licensees around the globe," Kort said.

Results by Company

palmOne continued to hold onto its lead in handheld shipments, accounting for 30.3 percent of the worldwide market last year. However, its shipments dropped over 10 percent from the year before.

In second place was HP, which had 21.7 percent of the worldwide market in 2004. Its shipments grew 17.4 percent during that period.

Although palmOne held the lead in the number of handhelds shipped, HP is in first place in revenue. It had $1.1 billion in revenue from the sale of iPAQs last year, while palmOne had 838 million in revenue from the sale of its products.

In third place in number of handhelds shipped last year was RIM, which had 17.7 of the market. Its shipments grew by an amazing 260 percent during 2004, when compared with the previous year.

"A major factor in RIM's recent success has been its ability to rapidly add many new carrier partners, expanding its geographical reach," Kort said. Roughly 20 percent of RIM's fourth quarter shipments were in Europe, and Gartner says RIM is poised to become the world's leading handheld vendor, in units and revenue, in 2005.

Rounding out the top five were Dell (5.6 percent) and Sony (3.9 percent).

More information is available on the Gartner web site.

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