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Palm, Microsoft in dead heat?

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Network World Fusion, 04/30/04

Analyst firm Gartner reported today that PalmSource (the software biz) and Microsoft were in a virtual tie for the top ranking in the worldwide PDA operating systems market for Q1 2004. After years of leading the pack, PalmSource saw its market share lead whither away as Microsoft and others develop operating systems for handheld devices.

Palmsource.gif Gartner said that Palm OS shipments dropped 20.7% in Q1 2004 (compared to last year's quarter), and the market share dropped to 40.7% The Microsoft Windows CE shipments grew 4.6% in Q1 2004 (compared to last year), and the market share for Microsoft is now at 40.2%, Gartner says. In 2000, the Microsoft share of the handheld OS market was 11%.

Gartner analyst Todd Kort said in a statement that many Palm OS users have delayed PDA purchases until devices come out with the new PalmSource OS, code-named "Cobalt." Microsoft bundling Outlook with every Pocket PC and the company's relationship with enterprise application developers have also led to the growth of the OS, Kort added.

Other operating systems tracked by Gartner include Research in Motion (14.8% market share, with 352.5% growth rate), and Linux (1.9% share, down 1.3%), meaning that it may just be a two-horse race for a while. These numbers don't include smart phone systems, which are tracked separately.

On the device side, PalmOne (the hardware biz) maintained the top spot, with a 30.5% market share, although shipments of devices were down 10.6% in Q1 2004. Of course, PalmOne this week announced two new PDAs, the Zire 31 and Zire 72, so the growth rate for devices are expected to go higher in the next quarter.

The information comes from a Gartner alert, for more information you can buy the report for $95 at the Gartner Web site.

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