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In-Stat/MDR optimistic about PDA market

Even though smart phones are the talk of the town, In-Stat/MDR says that PDA shipments will remain strong in 2004, thanks to a number of smaller, cheaper devices.

PDAs may be down, but according to In-Stat/MDR, they're not out.

In a report released this week, the Scottsdale, Ariz.-based research firm forecasts that PDA shipments will have a 6.5% compound annual growth between 2003 and 2008. The report also predicts that 10.8 million units will ship this year.

Even though PDA shipments declined in 2003 amid a sluggish economy, handheld devices continued their evolution into multimedia and business data devices. According to In-Stat/MDR analyst Cindy McCurley, manufacturers have focused on producing smaller, cheaper devices with integrated Bluetooth and Wi-Fi capabilities.

"The coming year will see advances in both software and components, with lower unit prices, improved operating systems, and increased attention to multimedia and wireless functionality driving growth," McCurley said.

The PDA market is also considerably diverse. In its research, In-Stat/MDR found that most vendors are offering a broad selection of low-end, midrange and high-end devices with wide-ranging functionality and prices.

"PDA manufactures and software companies are increasing their focus on currently available and 'in-development' corporate applications for PDAs," said McCurley, because they aren't as useful on smart phones, which usually have smaller screens and aren't as easy to use when entering data.

The report comes as platform and device makers alike turn their attention toward smart phones. PalmOne Inc. -- which In-Stat/MDR says continues to lead the PDA market, outshipping second-place Hewlett-Packard Co. nearly 2-to-1 -- has made its Treo 600 smart phone a focus of its marketing efforts.

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Meanwhile, PalmSource Inc.'s CEO, David Nagel, has said that the majority of its code base was rewritten so that its new OS 6 Cobalt platform could compete in the growing smart phone market.

McCurley said this year will be a telling one for the PDA market. "If the economic condition worldwide improves," she said, "we will see which platfroms and products corporate customers are more interested in using."

The report, titled "The PDA Market: Can it Re-invent Itself by Enhancing Usability?", is available from In-Stat/MDR for $3,495.

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