iSuppli predicts robust growth to continue for palm-sized PDAs - Top Stories

Mobile Internet, The, April, 2002

PDAs may be the smallest computer platform on the market but a gargantuan growth spurt in 2001 positions these palm-sized devices as a burgeoning market, according to the latest report from iSuppli Corporation's Market Intelligence Services group.

The PDA market experienced a robust 71.9 percent growth rate in 2001, during which 12.1 million units were shipped worldwide, with revenues of $3 billion in 2001, according to the report: The Personal Digital Assistant: ARMed for the Future? iSuppli predicts PDA shipments will reach more than 50 million units, with revenues of $8.2 billion, by 2006.

"This level of growth is typical for a young market," said Matthew Wilkins, senior analyst and author of The Personal Digital Assistant: ARMed for the Future? "We can expect to see growth of about 55 percent in 2002, but looking further out, the growth rate will stabilize at about 30 percent annually, as the market begins to mature."

As Palm, which holds a dominant 41.3 percent market share, and other PDA manufacturers segue into integrated wireless functionality, several changes in technology infrastructures will occur. Perhaps the most unilateral change to this market will be the adoption of the ARM microprocessor architecture. ARM-based microprocessors are currently found in 26 percent of PDAs on the market, but this is expected to change as a factor of Palm and Microsoft offering ARM-only operating systems, as well as the fact that all possible alternatives for future PDA microprocessors are ARM-based.

Palm also dominates the market for PDA operating systems, with 60 percent of the market in 2001. Its closest competitor, Microsoft, holds 30 percent of the market with its Windows CE/Pocket PC operating system. "The ARM-based microprocessor is emerging as the dominant architecture for PDAs," said Wilkins. "We can expect to see ARM processors make gains, especially as market leaders like Microsoft and Palm decide that their PDA operating systems will support ARM-based microprocessors exclusively. This decision has created a domino effect, requiring other Windows CE/Pocket PC-based suppliers to make the transition and support the ARM architecture."

The value of semiconductor content in PDAs dropped 24.7 percent in 2001, partially due to the relatively low semiconductor content in Palm products. iSuppli predicts semiconductor content will inch up marginally as shipments of Windows CE/Pocket PC-based PDAs increase in 2002.

The latest iSuppli Report from its Compute Platforms Practice entitled The Personal Digital Assistant: ARMed for the Future?, can be purchased from the iSuppli website at www.isuppli.com/reports.>

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