Palm faces testing times in PDA market

Palm looks to have a battle on its hands with Compaq looking set to edge ahead in the revenue stakes in the handheld market, according to Garter’s Dataquest. Palm will however, maintain its lead in terms of shipments.

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By  Zoe Moleshead Published  June 19, 2001

Palm looks to have a battle on its hands with Compaq looking set to edge ahead in the revenue stakes in the handheld market, according to Garter’s Dataquest. Palm will maintain its lead in terms of shipments, but Compaq despite shipping fewer iPAQs is expected to amass in excess $150 million for the second quarter of this year.

Palm together with HandSpring is expected to post hardware revenues of $130-135 million for the fourth quarter last year, below Palm’s earlier predictions. The higher average price of the iPAQ is pushing its revenues ahead of Palm.

“As better wireless messaging capabilities have become available, many enterprises are considering large volume purchases of PDAs. Palm has little to offer such companies,’ said Todd Kort, principal analyst, Gartner Dataquest’s computing platform worldwide group. “Palm is well behind the competition in implementing each of these wireless technologies, and this lack of innovation is a big contributor in its declining fortunes.”

Gartner analysts recommend some swift changes to upgrade its operating system and replacement of the Palm VIIx, as well as pursuing the proposed split between its hardware and software divisions.

“Palm needs to offer a credible high end device with features that compare to those offered by Compaq’s iPAQ,” added Ken Dulaney, research director for Gartner’s mobile business strategies program.

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