Worldwide Handheld Market Grew 65 Percent in 1997, According to GartnerGroup's Dataquest

3Com's PalmPilot Grabs 63 Percent of Standard Handheld Market

San Jose, Calif., May 26, 1998—As handheld devices become easier to use and more affordable, the worldwide handheld industry is experiencing robust growth with unit shipments reaching 2.4 million units in 1997, which is up 65 percent from 1996 shipments, according to Dataquest, a unit of Gartner Group, Inc. (NASDAQ: GART).

The standard handheld segment is leading the industry with 1997 shipments, surpassing 1.6 million units, a 131 percent increase over 1996 shipments. 3Com's PalmPilot is credited with much of this growth in the standard handheld market. 3Com shipped more than 1 million units in the standard handheld market, and its market share increased to 63 percent in 1997, up from 51.7 percent in 1996. 3Com's shipments grew 183 percent from 1996 shipments of 360,000 units. In the overall handheld market, 3Com accounted for 41 percent of the market.

"Individual business professionals continued to buoy the handheld market, and the 3Com PalmPilot's allure showed no signs of weakening throughout the year," said Mike McGuire, senior industry analyst for Dataquest's Mobile Computing Worldwide program. "While we expect individuals to continue to drive the handheld segment, early interest by corporations investigating the use of unconsciously portable reference devices such as the Pilot or the Windows CE-based palm-sized PCs as corporate information tools is definitely on the rise."

Hewlett-Packard was the No. 2 vendor in the standard handheld segment with 15 percent market share. HP was the No. 1 vendor in the Windows CE-based standard handheld segment with 43 percent market share. Casio and Philips followed with 17 percent and 16 percent of the Windows CE-based standard handheld market, respectively. Windows CE accounted for 26 percent of the standard handheld shipments in 1997.

"Clearly, the bevy of Windows CE-based palm-sized PCs are going to provide a competitive challenge for the Pilot platform in 1998," said Mr. McGuire. "While hardware advances are essential to the market's development, software applications tuned to leverage the handheld form factor and the Internet and intranet communication pipelines will be what build long-term momentum for the market."

While standard handhelds are responsible for 65 percent of the overall handheld market, the expandable organizers segment accounts for 35 percent of the overall handheld market. Expandable organizers grew 7 percent in 1997, with shipments increasing to 854,000 units. Sharp was the No. 1 vendor in this segment with 56 percent market share.

Standard handheld computers and expandable organizers are subsets of the larger handheld market. Standard handhelds are general-purpose computers that are distinguished from organizers by their adherence to hardware and software compatibility standards. They typically measure 4 inches by 7 inches by 1 inches and weigh about 1 pound.

Expandable organizers are also general-purpose computers that are distinguished by the capability to have the user add applications and memory, and that expansion is typically proprietary to a particular device or device family. Organizers measure approximately 3 inches by 6 inches by 3/4 inch and weigh less than 1 pound, have a keyboard, and operate on batteries.

An overview of the 1997 handheld market will be published in a Dataquest Perspective slated for publication in the coming months. Additional information on the mobile computing industry is available in Dataquest's Mobile Computing Worldwide program [ ]. This service focuses on mobile computing hardware but does discuss software on a qualitative basis in terms of how these changes impact mobile computing hardware.

To subscribe to Dataquest's Mobile Computing Worldwide program, please call 800-419-DATA, or 408-468-8009. More information about Dataquest's programs, descriptions of recent research reports, and full text of press releases can be found on the Internet at

GartnerGroup's Dataquest is the recognized leader in providing the high-technology and financial communities with market intelligence for the semiconductor, computer systems and peripherals, communications, document management, software, and services sectors of the global information technology industry.

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