GartnerGroup's Dataquest Says Worldwide Handheld Market Grew 61 Percent in 1998

San Jose, Calif., February 8, 1999—As the mobile computing market moves toward smaller, lighter products, handheld devices are experiencing explosive growth, with worldwide handheld shipments surpassing 3.9 million units, a 61.4 percent increase over 1997 shipments, according to Dataquest Inc., a unit of Gartner Group Inc. (NYSE: IT). 3Com's Palm Computing Division continues to lead the industry, as its shipments reached 1.6 million units in 1998.

"3Com's growth is particularly impressive in that the vast majority of its sales were to new users, almost doubling the installed base over 1997 levels," said Scott Miller, principal analyst for Dataquest's Mobile Computing Worldwide program. "This growing base of users makes the PalmOS platform attractive to developers as well as sets the stage for further platform expansion."

Sharp, the No. 2 handheld vendor in 1998 (see Table 1), enjoyed broad success from multiple product lines. Psion's strength was in Europe because 76 percent of the company's shipments were from that region.

Hewlett-Packard posted the slowest growth among the top vendors, but Dataquest analysts said 1998 was a transition year for the company. "Hewlett-Packard is moving from its traditional DOS-based HPC products to new Windows CE models," Mr. Miller said. "The company shipped more Windows CE products than anyone in 1998, and we expect significantly higher growth rates in 1999 as shipments begin to track with Windows CE growth."

The Palm operating system continued to dominate the handheld segment, as it accounted for 41 percent of 1998 handheld shipments. Windows CE was the No. 2 operating system in the handheld market with 25 percent of the market, followed by EPOC32, which reached 13 percent of the market.

Dataquest analysts will examine the future of the mobile computing market during the upcoming GartnerGroup's Dataquest Predicts 99 Conference, to be held March 22-24 at the San Diego Hyatt. Dataquest analysts will provide their outlook for the high-technology industry. GartnerGroup's Spring Symposium/ITxpo 99 will be held concurrently at the San Diego Convention Center. Members of the press can register for the conference by contacting Josh Lefkowitz at 212-696-2000, or at jlefkowitz@tsipr.com. Additional information on the event is available on the GartnerGroup Web site at http://www.gartner.com/public/static/events/main.html.

Additional information on the handheld market is available by subscribing to Dataquest's Mobile Computing Worldwide program. The program focuses on mobile computing hardware but also discusses software on a qualitative basis in terms of how these changes impact mobile computing hardware. More information on this program is available on Dataquest's Web site at http://www.dataquest.com/dq/static/offer/programs/semi-ww.html.

To purchase the report or subscribe to this 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 http://www.dataquest.com.

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.

As the world's leading authority on IT, GartnerGroup provides clients with a wide range of products and services in the areas of IT advisory services, measurement, research, decision support, analysis, and consulting. Founded in 1979, with headquarters in Stamford, Conneticut, GartnerGroup is at the center of a global community serving Fortune 1000 clients from 80 locations worldwide. Additional information about the company is available on the Internet at http://www.gartner.com.