Study Predicts Steep Decline for PDA Market

The traditional PDA is heading for significant declines in sales, and in fact is nearing the end of its life as a major product segment, according to In-Stat. Shipments reached only 8.7 million units in 2004, down from 10 million in 2003, the high-tech market research firm says.

The outlook for upcoming years is not good, as the PDA market will have a negative Compound Annual Growth Rate (CAGR) of -21.5% during the 2004-2009 period. By 2009, it is expected that this segment will be composed of devices designed for specific vertical markets and low-end products. The market decline will occur as users switch to other products, such as smartphones and portable media players, a natural evolution of the category.

In-Stat has also found that:

  • Manufacturers will introduce more corporate-focused and niche-focused devices, such as those incorporating GPS, this year.
  • Intel’s XScale processors continue to be the most popular; however, most manufacturers are using processors from several vendors across their product lines.
  • Bluetooth, Wi-Fi, and cellular wireless devices will be offered by more traditional PDA vendors as they look to compete in the smartphone market.  
  • By the end of 2005 there will be significant price reductions and more stylishly designed smartphones, thus attracting more users from PDAs to this category.

The report, The PDA Market: 2004 Review and Outlook for 2005, compiles research and analyses on the worldwide PDA market, and provides profiles of major vendors and their most recent products. It also discusses market trends, opportunities and challenges facing this mature market. It forecasts unit shipments and revenues for the period 2003 to 2009 and depicts processor market shares and revenue. In addition, it provides a review of the market in 2004, in terms of unit shipments, vendor and operating system market shares and trends.

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We'll See

Wollombi @ 3/2/2005 1:54:14 PM # Q
While some of what they say makes some sense, overall it is still nothing more than throwing the bones and trying to predict the future by they way they fall.

The market for traditional PDA's may shrink, or they may evolve into better, more capable devices. Personally, the more I can do with a device that fits easily and comfotably in my pocket, the better, but only in a device that does all of it's functions well enought that I don't miss a dedicated unit for that particular function.


There is nothing noble in being superior to your fellow man; true nobility is being superior to your former self.

RE: We'll See
RhinoSteve @ 3/2/2005 4:23:43 PM # Q
I second this. This is a "throwing bones" article to say the least.

Remember the people who write this stuff are mostly failed marketing types that have become journalist hacks that instinctively follow instead of innovating and following.

Eight years ago, these guy were also predicting that Apple was going to go broke. Frankly, there is always an innovation around the corner that smacks complacency heavy. That is what I love about this space!

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With products like these... no duh!

adamsmark @ 3/2/2005 1:49:23 PM # Q
Let's face it:

1. PDA's are too expensive. The PalmOne T5 is $400 the HP iPAQ hx4700 (the nicest PPC I've every seen) is $649. For a small hand-held computer, that's pretty steep. These are great machines, but in a world of Mp3 players, digital cameras, and cell phones, are these appropriately priced?

2. PDA's haven't kept up with expectations. This really isn't anyone's fault, but ever since the Apple Newton, users' expectations have been unrealistic--text recognition, battery life, etc. Nevertheless, PDA manufacturers should at least try to keep up with expectations.

3. PDA users never get what they really want. Some want their PDA to replace their laptop. But since companies keep changing their connection points, how are users to keep up. Having to buy new accessories every time you upgrade your handheld is quite irritating. With Palm, when will we get Wifi and Bluetooth in one unit? When will we get G1? When will be get the top-of-line, full-size screen (one that doesn't hum). When will we get a unit with decent battery life?

The PDA market will decline because PDA manufacturers really aren't giving us a reason to shell out more bucks.

RE: With products like these... no duh!
palmdoc88 @ 3/2/2005 2:30:18 PM # Q
"The PDA market will decline because PDA manufacturers really aren't giving us a reason to shell out more bucks."

Amen to that.

T3 & T5 user

RE: With products like these... no duh!
LiveFaith @ 3/2/2005 5:00:50 PM # Q
I agree too. Being a Palm OS user with a T3 gives little or no incentive to upgrade for going on 18 months now. I'm not whining, but this is true.

At $400 & $600, we need to be seeing nice hard drives for movie & music, multi-wireless, GPS, larger screen on the same real estate and legitimate cause to dump the laptops. Hope springs eternal this spring. Maybe the Veld cometh! Hehe

Pat Horne;

RE: With products like these... no duh!
Midknyte @ 3/2/2005 5:22:25 PM # Q
"2. PDA's haven't kept up with expectations. This really isn't anyone's fault, but ever since the Apple Newton, users' expectations have been unrealistic--text recognition, battery life, etc. Nevertheless, PDA manufacturers should at least try to keep up with expectations."

My expectations are not unrealistic - all I want is the inclusion of off-the-shelf technology.


RE: With products like these... no duh!
Patrick @ 3/2/2005 6:55:37 PM # Q
I upgraded every year (sometimes more often than once a year) until the T5 came along. I had the bucks, all P1 needed was to produce a device that gave me more, not less. Alas, my bucks are still in my bank, not P1's.

Phisical style or form factor
Roberto_tores @ 3/2/2005 9:22:04 PM # Q
one important factor in the declining sales is the form factor. Compare the T5 and iPAQ hx4700 to the palm V and iPAQ 1910. PDAs are gettin bulky square and plastic.

if new devices like the palm V and iPAQ 1910 appear again the market will increase

RE: With products like these... no duh!
svrontis @ 3/3/2005 6:32:19 AM # Q
Roberto tores, I agree with you brother.

Sorry to interupt all the gloomy predictions, but has anyone noticed that that the Discussion Forums are just as full as ever with posts from Newbies (bless them) asking really basic questions about their new palmpilots? Someone had better tell these guys that the whole palmpilot industry is doomed and that they wasted their hard earned money (as have the likes of M$, HP, Dell, etc).

RE: With products like these... no duh!
cbowers @ 3/3/2005 1:24:09 PM # Q
"My expectations are not unrealistic - all I want is the inclusion of off-the-shelf technology.


Then I guess you might have bought a HandEra. People were putting Microdrives in them 4 years ago.

It's why the PocketPC camp has their hardware heads on straight with dual slots, SD/CF. You can plunk in the same 3/4/6 Gig CF hard drives that the likes of the Ipod Mini, and other MP3 players are sporting.

RE: With products like these... no duh!
Bexa @ 3/4/2005 6:05:27 AM # Q
Hey! I'm still carrying my Tungsten T around. With a 1 gig SD card and my Sony-Ericsson bluetooth phone, it's hard to justify any kind of upgrade. I wait for the killer Palm PDA that will tempt me away from my current configuration...but I'm not holding my breath. And I'm not tempted to go over to the "dark" side either.

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I'm moving on.

angerson @ 3/2/2005 2:33:35 PM # Q
I'm a PDA junky. I've owned dozens of PDAs from the Newton up to the T3 and I'm generally an active community member on PDA sites, I mean heck I even designed the new PDA Buzz website (sorry). I just love tech gadgets and while the "cool toy" factor of these devices somewhat always outweighed their usefulness, I did rely on my handheld to help me run my business.

With that said, this past Friday my business burned down due to a fire in an adjacent restaurant. I lost simply everything, including every PDA I still owned. While insurance will cover a small portion of my loss and will allow me to purchase new equipment, I have to admit I surprised myself when a PDA did not make it to my list of replacement items. I've decided that moving forward, at least for the short term, I'm not going to replace my T3.

Maybe I'm just jaded because the company formerly known as Palm appears to be floundering without direction. Maybe I'm upset because although I've owned many PPCs, the software never lives up to the hardware. Or maybe I just realized that I'm strapped for cash and plunking down $300 - $500 for an organizer that doesn't have an essential position in my current workflow is simply not a wise move on my part.

Who knows? The point is, at least for me, it's time to move on. Sure I'll be back, but it's gonna take something a bit more revolutionary than yet another repackaged Palm or clunky, five-clicks-to-quit-an-application PPC. And sadly I suspect a lot of people feel this way. Without an incentive to upgrade, we just won't.

RE: I'm moving on.
rav @ 3/2/2005 3:58:37 PM # Q
I must agree with your comments... after owning almost every PDA out there I don't think I'd replace my T2 if something would happen to it. No WiFi, falling-out screws, change of connectors on new models (and most of the new P1 PDAs don't even have a hotsync/charging cradle anymore), high price (paid a ridiculous $350 for the T2 new about a year ago), plus the loss of Sony as a major player, re-empahsizes the doom of the PDA market.

If anything, I would probably invest in one of those $25 Casio or Sharp organizers to store names and addresses and might look into getting one of those micro laptop computers (a la Dell 700m or Sony T150) instead of ever buying another PDA again.

Thanks Palm, P1... you were on the leading edge of technology at one point and in the past few months you have dopped the ball (can you say T5) on the market that you once owned...

RE: I'm moving on.
LiveFaith @ 3/2/2005 5:06:30 PM # Q
Just visualize all that cavernous flash RAM ... breath in, breath out ... relax ... very good.

Are you ready to plunk down the $400 now? P1 is bundling the TE2 with keyboards, cases, SD cards ... hopefully they'll even throw in a T3? :-o

Pat Horne;

RE: I'm moving on.
joad @ 3/7/2005 1:13:15 PM # Q
"Just visualize all that cavernous flash RAM..."

Yes, the addition of NVFS seems to be all the major "innovation" that Palm has produced in the last 18 months or so...

Gee thanks, PalmOne- you designed an "upgrade" to the Treo 600 with 60% of the RAM... making it unusable as an upgrade. The nice thing is that since it will sit in a drawer unused - years from now when you plug it in you will still be able to see all your old data!

You would think a company in the financial condition of PalmOne would aim to get all the guaranteed sales of "power users" that they would have had with better units, rather than design underpowered garbage that we must leave unsold on the shelves because they are WORSE than our 1-2 year old units. Not that I don't appreciate having the extra spending cash ;)

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PDA Market

JarJar @ 3/2/2005 2:59:43 PM # Q
The move from PDA to smart phone is neither good nor bad; it is neither cause to gloat nor despair. It is simply a natural evolution of the market.

If Palm (both of them) is paying attention they need to be players in this market. They need to have products in the lower and higher ends of the market. I expect a lower priced product to have fewer features (but not intentional crippling). I expect lower margins at both ends.

I am not so naive as to demand a cheap device that has all features.

The mobile phone market has tighter margins. Unless Palm is equipped to accept this, they will die. If they maintain PDA style margins, they will do better in the short run and shoot their own foot in the long run.

RE: PDA Market
LiveFaith @ 3/2/2005 5:09:12 PM # Q
Oh, that my T3 had about a 1500mah battery and GSM/GPRS/EDGE. Just like it is and I would be in hardware heaven. Keep the PDA-centicity and add the phone aka T|W style. Don't know if the market is there tho?

Pat Horne;
RE: PDA Market
Wollombi @ 3/3/2005 2:07:32 PM # Q
Given how the original Blackberries did, I would say there is definately A market, but it's not THE market. Traditional Blackberries did very well. Now imagine if they had all that Blackberry goodness while running the PalmOS...

Excuse me....I need to go cry.


There is nothing noble in being superior to your fellow man; true nobility is being superior to your former self.

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Really Appreciating My Tungsten T3

Sid_Sid @ 3/2/2005 3:39:17 PM # Q
It's news like this that really makes me appreciate my Tungsten T3, the last great PDA from Palm. I'm not looking forward to the day that I need (not want) to replace it, so I'm hanging on to it for as long as possible.

RE: Really Appreciating My Tungsten T3
rikster @ 3/2/2005 4:32:58 PM # Q
Same here mate. I'm sticking with my T3 - it certainly is the best handheld palmOne ever made. It will probably become the best handheld they ever make - as now they are producing high priced plastic impressions with features missing.

RE: Really Appreciating My Tungsten T3
MarcusRonning @ 3/3/2005 11:31:23 PM # Q
I have been a Palm loyalist, guru, you name it. From a PIM standpoint the Palm Rules.

But Palm must not be reading the PDA websites or seeing all the Pocket PC's with built in Wi Fi. If the trend continues and the Palm users are spat on again and again.....where do they think we are going.......

Wake up Palm, or the Pocke PC will be next to my PC soon.

I agree the T3 rocks, still my Palm of choice. The T5 took out my voice recorder, are you kidding.....I am in sales and leave about 15 voice reminders a day..... Thanks to the 1GB SD Card...

I am sorry but I can't use the Treo, I want the full screen...

The Black Berry with a Palm OS would be very nice!!!

Palm is in big trouble unless they change their ways, and quickly.....

Plug the holes, right the ship, and wake the hell up!!

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Add hard drive or 6 GB Flash / Rinse / Repeat

pkuhns @ 3/2/2005 4:31:38 PM # Q
I know this market is tanking courtesy of amazing cell phones like this one:

But Palm can keep their margins and set themselves apart. If they don't get bought by Apple, then tell them to MAKE A HARD-DRIVE BASED PALM!

Yes honest injun its that simple. Make a device similar to this:

Just make it the same size as the Palm V or Zire 72. The Palm OS is refined and has thousands of apps. Beat M$ to the punch by placing a 6 GB flash or 40 GB hard drive and release some software similar to Photoshop.

Price it at $299 (the sweet spot). Every digital photographer, mp3 junkie would move to Palm devices and the market would continue...

NX70 addict...

RE: Add hard drive or 6 GB Flash / Rinse / Repeat
Surur @ 3/4/2005 3:00:36 PM # Q
I suggest this device (The MDA IV) will get the PDA converts, not a stupid input deficient smartphone.


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The Death of Connected PDAs

EdFrmBrighthand @ 3/2/2005 4:49:12 PM # Q
This is just another article pointing out that sales of non-cellular-wireless handhelds are declining. Sales of handhelds with built-in cellular-wireless modems are actually increasing.

Therefore, it's clear that handhelds aren't dead; instead, unconnected PDAs are on their way out. I think it's a little too soon to close the coffin (millions of unconnected handhelds are still being sold each year) but that's definitely the direction we are headed.

Also, this article ignores that many non-cellular-wireless handhelds are using Bluetooth-enabled mobile phones as modems.

So take this study with a grain of salt. When it says "PDA," you should fill in "PDA with no wireless capabilities at all." And the fact that non-wireless PDAs are going to be eventually phased out has been clear for most of the last 5 years.

There's nothing exciting at all in this report. It's simply pointing out the obvious. It's only its poor choice of terms that makes it seem important.


RE: The Death of Connected PDAs
mikecane @ 3/2/2005 6:29:35 PM # Q
It's good to see that not being able to edit Comments has finally hit *you* too. "Death of Connected PDAs" -- ha!

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Smartphones Overestimated

Gekko @ 3/2/2005 5:23:01 PM # Q

i think everyone is overestimating the smartphone market just like they overestimated the pda market back in the late 90s. Back in the late 90s, pda demand was going to grow to the sky. REMEMBER THAT??????????????? And remember when the bottom dropped out??????

history repeats. palmone is a one-trick donkey that will hit the wall with overpriced niche smartphones just like they did with pdas. all of a sudden you wake up and demand has retarded and you got inventory backlog and the bottom drops out. mark my words.

(reposted from my forum post)

RE: Smartphones Overestimated
mikecane @ 3/2/2005 6:30:33 PM # Q
That's why PalmSource went and bought CMS. When they fear their fat paychecks are on the line, they smarten up fast. Expect to see a PalmSource (NOT PalmOS!) OS for El Cheapo Chinese Fall-Apart Phones before we *ever* see a full-fledged Palmix running on a conventional PDA!

As for Cobalt... just as in the old Soviet Union, it is now an unperson. Never existed. Got that?

And Gekko, you won't be able to complain one damned bit about this, you running dog of the UberDollar. They will just be doing what makes *economic sense*.

RE: Smartphones Overestimated
mikecane @ 3/2/2005 6:37:28 PM # Q
And let's all remember something:

palmOne is a *hardware* company

PalmSource is a *software* company

**NEITHER** one has to stick with PalmOS.

Think about that for a moment.

Scary, ain't it?

RE: Smartphones Overestimated
mikecane @ 3/2/2005 6:58:59 PM # Q
Which brings us to this interesting question: Will PalmSource change its name? PhoneSource? At least they get to keep all the monogrammed corporate shizzle...

RE: Smartphones Overestimated
Gekko @ 3/2/2005 7:01:19 PM # Q
>And Gekko, you won't be able to complain one damned bit about this, you running dog of the UberDollar. They will just be doing what makes *economic sense*.

no man. penny-wise and pound-foolish is a bad strategy.

RE: Smartphones Overestimated
mikecane @ 3/2/2005 8:31:28 PM # Q
Where's the pound foolish?! You just Uzied their idea of smartphones! The low end is the fat end, when it comes to the market. Gates is low-end, Apple is high-end. Who brings in the most loot?

Get over it. PalmOS is dead. You'll be glad to have its functionality in a phone you can pick up for $50 and throw away when the paint starts to rub off on your hand. Which, given your sweaty palms... should make everyone involved much money!

RE: Smartphones Overestimated
Foo Fighter @ 3/2/2005 11:14:31 PM # Q
"Gentlemen, please! You can't fight in here! This is the War Room!"

...a little quote from Dr. Strangelove.

Contributing Editor,

RE: Smartphones Overestimated
mikecane @ 3/5/2005 10:51:26 AM # Q
"Mein Fuhrer! I can walk!!"

You ain't the only cultured one here, Foo...

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Maybe they need to do a real study?

AJG @ 3/2/2005 7:02:27 PM # Q
I know some of the greatest marketing minds probably helped in this study *cough* but I have a problem with it. They are only looking at numbers but not why it is happening. Although It does seem to hold true that handheld sales are down, for me it isn't about not getting a traditional PDA it is about getting a really good PDA. I have had my Tungsten T2 for some times. I have not upgraded because there isn't a PDA out there that can fit my TT2's nitch. The T3's battery life was mediocre, the T5 got rid of the sliding design and didn't add Bluetooth. I've thought about PocketPC but there is the problem that I don't want to return to a Windows based OS. I'm not ready to get a smartphone... they are too big and I am not willing to got out to a bar with a brick in my pants. I still want my small phone. So... when the PDA (PalmOne I'm talking to you!) makes something that I feel can replace my TT2, then I will buy it. Until then, myself and I feel many others, are going to stick with their current ones. I still have a friend with a Palm Vx because there isn't anything out there he wants. Is the PDA industry dead or are the upgraded models not worth upgrading to?

RE: Maybe they need to do a real study?
Gekko @ 3/2/2005 7:15:08 PM # Q

True. As a leader, it's PalmOne's and PalmSource's responsibility to create innovative, high quality products to DRIVE growth and demand. Look at MSFT, INTC, DELL - and even APPLE (post Jobs) - they are constantly stimulating demand by DRAMATICALLY LOWERING COSTS WHILE AT THE SAME TIME INNOVATING/ IMPROVING PRODUCTS!

RE: Maybe they need to do a real study?
svrontis @ 3/2/2005 8:38:47 PM # Q
> the T5 got rid of the sliding design and didn't add Bluetooth.

Actually, the T5 does come with Bluetooth. It doesn't have WiFI. It doesn't have a 12-volt lead acid car battery either (which would be necessary if you want to run WiFi for any length of time).

RE: Maybe they need to do a real study?
cbowers @ 3/3/2005 1:59:40 PM # Q
Please. That's a tired and inaccurate argument. Do the math before you post (or at least ask a Tungsten C user about their battery life). And then look around and see that we're getting to be about the only platform that hasn't embraced WiFi.

Or maybe do a continuous ping rundown test with a bluetooth network connection and shock yourself at your battery usage rate.

The battery life issue with bluetooth vs. wifi has little to do with milliamps and more to do with usage profiles.

If all I was to do with WiFi (pretending it was possible) was dial the odd phone number (PDA to Cellphone), a hotsync once or twice a day, or stream a few several minute phone calls to a headset, my wifi radio wouldn't be on very much either.

But use your bluetooth connection for the same network heavy tasks, for the same extended periods, and you'll be wanting a 1500mAh battery in your bluetoothed Tungsten as well.

RE: Maybe they need to do a real study?
svrontis @ 3/4/2005 4:32:35 PM # Q
You're right, I have not done the math. However, I believe that p1's decision to go with BT (and not WiFi) in the T, T2, T3, Zire 72 and T5 was based largely on an engineering decision - WiFi just uses more power that BT. Which leads to a trade off: (a) do you add WiFi and a bigger battery, which necessarily means a bigger and heavier palmpilot? OR (b) do you go for a more reasonable size/weight? (Compare the size and shape of the TC with the T5 to see what this trade-off means.)

Many of the posts here at PIC claim that p1 are not innovative because they have not included WiFi in many of their models. Personally, I think that criticism is unfair. Don't forget that the TC was one of the first models on the market with WiFi - which means that p1 have the knowhow to add WiFi if they wanted to. But I think that engineering issues drove them away from WiFi.

This whole debate reminds me of what happened with the m505. Remember the howls about how dim the screen was on the m505? Clearly, the engineers had set the screen brightness in a way to preserve battery power for as long as possible, but a lot of users didn't seem to understand this. p1's reaction was to set screen brightness much higher on later models, to the detriment of battery life. The result is that I now have a wonderful TE, which even on the lowest brightness setting chews up the battery power pretty quickly. So I now have to run the EnergyDimmer application to set brightness to level much lower than the lowest factory setting, so as to preserve power. (Which means, of course, that p1's engineers were right in the first place!)

I fear that p1 will react to the current complaints by adding WiFi to most of their units in the future, which will require a bigger battery, which in turn will result in future models being the size of bricks. That is absolutely the last thing I want (especially as I have no desire to use WiFi), but this is probably where we will end up.

Sorry for the long post. Sometimes I think people get carried away with their demands for hardware features, without thinking about what it means in terms of the inescapable design/engineering compromises.

The_Voice_of_Reason @ 3/5/2005 12:03:49 AM # Q
OK, svrontis: why is it that other manufacturers (Sony + numerous PPC manufacturers) can ship PDAs with Wi-Fi + great battery life, but Palm can't? What's that? Can't hear you.


Press release: CUPERTINO, California — February 11, 2005 — Apple® announced today that Steve Jobs will begin selling his own feces to Apple Cultists beginning March 1. Apple's new iPoo™ lineup is expected to easily surpass the iPod shuffle as the company's most popular product. Yes, Apple Cultists can already easily create their own iPoo™, but feces didn't seem cool until Jobs told them it was cool. Remember, kids: the ONLY cool feces is Jobs' highly individualistic, rebellious iPoo™ (coming soon in six different colors/flavors, including the red [hematochezia] and black [melena] U2 GI bleed model)


Sony CLIE UX100: 128 MB real RAM, OLED screen. All the PDA anyone really ever wanted.

RE: Maybe they need to do a real study?
svrontis @ 3/5/2005 5:47:43 AM # Q
OK, here goes:

1. The title to your post is as eloquent as ever.

2. The TH55 is the only Sony WiFi enabled model (which I know of) which had a reasonable size. The battery life on the TH55 has been rated at about 3 hours with WiFi switched on (refer to

3. With the exception of the iPAQ 4150/4155, all of HP's units with WiFi are bricks (and ugly bricks at that). The iPAQ 4155 was rated at about 2 hours of battery when using WiFi (refer to the review at

4. The details on the Dell Axim X50v are a little sketchy - rates the battery life at about 3 hours, but they ran a WiFi connection for only an hour during their test.

5. I don't know about you, but 2 or 3 hours between charges doesn't cut the mustard, not the way I use my palmpilot.

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