• by August 5, 2005

A THIRD SCREEN FALLS INTO SECOND PLACE -- Imagine having the world of mobile media literally in the palm of your hand only to lose your grasp just as the market is poised to take off. That seems to be exactly what's happened to handheld computer marketer Palm, the pioneer in the field of so-called personal data assistants, according to the latest stats from the palm readers at Gartner Inc. Apparently, Palm's love line isn't as long as analysts had previously thought. And, at its current rate of market share erosion, its life line may not be all that long either.

In the last year alone, Palm's share has fallen from a third of all handheld shipments to just under 18 percent, according to Gartner. What's really striking about Palm's erosion is that it's occurring as the PDA market's growth accelerates. In the second quarter of 2005, 3.6 million PDAs were shipped, a 32 percent increase over the second quarter of 2004. In fact, Gartner projects hand-held marketers will ship more than 15 million units by the end of the year.

The biggest share of that market will go to Research In Motion (RIM), marketers of the infamous crack... er, BlackBerry device, which will account for more than a 23 percent share of 2005 hand-held shipments, surpassing Palm for the first time since Gartner began tracking the market. Hewlett-Packard, Nokia, and T-Mobile make up the rest of the market, followed by a number of other smaller players.

"Wireless PDAs are increasingly seen as an adjunct or alternative to notebook computers," note Gartner's principle palmist Todd Kort.

Not surprisingly, the shift in market share among PDA manufacturers also has some big implications for computer operating systems. As Palm's hardware shipments erode, the mass of its proprietary operating system will erode as well. And while RIM has become the dominant hardware supplier, it's actually an also-ran in the operating system market. The big winner is -- yeah, you guessed it - Microsoft. The leader in desktop and laptop computing is now also the leader in the hand-held market, according to Gartner, accounting for nearly 46 percent of PDA operating systems sold in 2005.