Palm retains mobile lead by units, Compaq top by value

- Bluetooth model takes off, keeping Compaq ahead of its rivals

Reading, UK - Friday, April 26th 2002 - for immediate release

• Total EMEA mobile device shipments in Q1 2002 down 30% on Q1 2001
• Palm retains lead, with 34% unit share; Compaq in second, with share up to 21%
• In shipment value terms, Compaq leads with €92m, ahead of Palm with €77m
• Integrated Bluetooth models will become essential by year-end

EMEA Q1 2002 - highlights from the Canalys research

While overall shipments were down 30% on the same quarter one year ago it must be remembered that Q1 2001 was exceptional and marked the last quarter where the market was growing at more than 100% year-on-year. Future quarters are expected to display much healthier growth comparisons.

Palm's share stabilised and the company retained its lead. While its share was down by more than 10 percentage points from a year ago, the sequential decline from Q4 2001 was negligible. Compaq continued to make gains, despite the arrival of Pocket PC 2002 models from several competing vendors over the last two quarters. HP also grew over last year, but did not repeat its great performance of last quarter.

"Palm is ahead by units, but in value terms, Compaq is the leader," said Canalys senior analyst Chris Jones. "The iPAQs' higher price-points put the value of Compaq's shipments in Q1 2002 at €92 million against Palm's €77 million. The top-of-the-range, integrated-Bluetooth iPAQ H3870 is selling well, with demand outstripping supply for much of the quarter."

Canalys forecasts that integrated Bluetooth will have an even greater impact as the year goes on, particularly in Europe. Compaq is currently the only vendor shipping a handheld with this feature. Analyst Andy Buss believes that handheld vendors with no integrated Bluetooth offering by year-end will pay the price.

"I expect a few will make the mistake of looking at the US and concluding that Bluetooth isn't important. In Europe it is. Bluetooth phones, like the Sony Ericsson T68, are selling well and there are more models on the way from Nokia and the other major handset vendors. The partnership of GPRS mobile phone and handheld, linked by Bluetooth, opens up many possibilities," said Buss. "We strongly advise handheld vendors to focus on integrating Bluetooth rather than GPRS and compete actively for the customers who will prefer a two-device wireless data solution. It's good to see vendors promoting Bluetooth, but an integrated solution is always going to be preferable to an expansion slot approach, and easier for the customer to configure and use."

In the battle of operating systems, Canalys research shows that Palm OS still leads, with Windows CE again closing the gap, almost doubling its share from a year ago. The Symbian share is at its lowest for a year, but Buss expects some radical shifts later in 2002 when smart/feature phones such as the Bluetooth-equipped Sony Ericsson P800 and Nokia 7650 begin shipping.