Palm's U.S. Market Share Slips a Bit in 2001

Posted By: Ed Friday, February 1, 2002 8:28:14 AM

While Palm continued its domination of U.S. retail sales in 2001, its lead wasn't as wide as in previous years, according to a report from NPD Techworld. During all of last year, Palm accounted for 58% of handhelds sold. In 2000, that number was 71%. It was a bad year for Palm, with a springtime sales slump caused by the poorly-handled rollout of the m500 series. Nevertheless, the company still sold 2.84 million handhelds, an increase of about 300 thousand over the previous year.

Palm's loss was everyone else's gain. The rest of the top five all gained at least a bit. For example, Handspring's share of the market was 15%, up just 1%, for a total of 735 thousand units.

Number three was Compaq, who had 7%, up from 2% the previous year. That's 343 thousand handhelds.

Fourth was Sony with 6% of the market, also making a big jump from 1%, accounting for almost 300 thousand units sold. Sony share is likely to be higher this year as it was only really competitive after its S and N series were announced around mid-year.

HP accounted for 5% of retail sales in 2001, up just 2%, selling 245 thousand.

These five companies account for 91% of the U.S. retail market, with Palm OS devices totalling up to 79% and Pocket PC OS ones 12%.

There were 4.9 million handhelds sold in the U.S. last year, which is up 36% from the previous year. Nevertheless, price wars among the Palm OS manufacturers drove prices down to the point where total sales revenue increased only 21%.

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Look out Palm OS!

TDS @ 2/1/2002 9:01:04 AM #

Look out Palm OS - at 79% market share vs. 12% for Pocket PC, Pocket PC is nipping at your heels! At this rate, they will be selling 1/2 as many units as the Palm OS units by 2050 or so!
And while we are at it, McDonalds had better watch out. Earls Coffee shop just opened a second location, and now is getting close to taking over the McDonalds lead!
OK. This comment was a little sarcastic.

Let's take it to PPC for a change!

I.M. Anonymous @ 2/1/2002 10:56:37 AM #

Wanna start a flame war against PPC for a change. Head to this thread on Wired Guy and let them have it:

http://www.wiredguy.com/forums/showthread.php?s=b258b3d592f1fb378101ec13fd2f200c&threadid=511

Opposite of last week story?

I.M. Anonymous @ 2/1/2002 9:39:43 AM #

Doesn't this story directly oppose a story last week, which suggested Palm widened its margins with the non-PalmOS groups?

*sigh*. You can't trust any of this stuff.

RE: Opposite of last week story?

Ed @ 2/1/2002 9:43:50 AM #

You have to keep in mind what is being measured. The story you are referring to covered worldwide shipments of handhelds in the fourth quarter of 2001. This one covers only U.S. retail sales for the entire year.

In my opinion, the previous story gives a more accurate view because it includes all handhelds shipped anywhere to anyone. Retail sales figures ignore online, direct, and enterprise sales.

Just in case, here's a link to the other story being referred to:
www.palminfocenter.com/view_Story.asp?ID=2870

p.s. I tried, but I can't get through this without quoting Mark Twain: "There are lies, damn lies, and statistics."

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News Editor

RE: Opposite of last week story?

I.M. Anonymous @ 2/1/2002 9:46:10 AM #

Take these so called studies with a grain of salt. They are very confusing and oftentimes ahve biases.

Marketshare vs actual no. of units sold.

I.M. Anonymous @ 2/1/2002 10:47:33 AM #

At 36% increase over the previous year, the previous year looks like 3.6 million units sold (give or take a few).

71% of that = 2.56 mio. units

Versus 58& in 2001 = 2.84 mio units.

That is still a 10% increase in overall units, despite a market share drop.

I know, market share is important however, nevertheless Palm managed to sell more units overall despite the influx of competitors.

Considering Palm has only 'inferior products' (not my personal opinion), this does not look all that bad. More like the fact that there are a lot of people wanting to buy 'inferior products'. 2.8 million people can't all be stupid/ignorant.

Sony will take over as number as soon as the end of December

I.M. Anonymous @ 2/1/2002 12:03:30 PM #

My predictions....Very likely scenario as T615C gains momentum...

RE: Number 2 I mean

I.M. Anonymous @ 2/1/2002 12:05:34 PM #

Number 3 by end of June.

The real story finally

I.M. Anonymous @ 2/1/2002 2:10:37 PM #

Last weeks story was written in such a way that it gave people the false impression that the market share from Palm was on the grow, rather than those that were really growing. That was my major complaints in that article. Thanks for writing this in the correct light.

RE: The real story finally

I.M. Anonymous @ 2/1/2002 2:22:08 PM #

Or maybe this is not the true either, it deppends on how you read the numbers. An interesting approach was made above:

"At 36% increase over the previous year, the previous year looks like 3.6 million units sold (give or take a few).

71% of that = 2.56 mio. units

Versus 58& in 2001 = 2.84 mio units.

That is still a 10% increase in overall units, despite a market share drop.

I know, market share is important however, nevertheless Palm managed to sell more units overall despite the influx of competitors."

RE: The real story finally

I.M. Anonymous @ 2/1/2002 2:49:31 PM #

Market share is market share. Palm is losing the available share in the market while competetors are gaining.

RE: The real story finally

I.M. Anonymous @ 2/1/2002 4:53:08 PM #

You mean "excluding the three most recent quarters of 2001 - especially the fourth quarter", which brings you back to Palm is still strong.

RE: The real story finally

I.M. Anonymous @ 2/1/2002 5:06:34 PM #

Yes, Palm is down. But it still dwarfs all its competitors.

|||||||||||||||||||||||||||||||||||||||||||||||||||||||||| Palm

||||||||||||||| Handspring

||||||| Compaq

|||||| Sony

||||| HP

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|||||||||||| Pocket PC

Internet and Corporate Sales?

I.M. Anonymous @ 2/1/2002 11:15:05 PM #

Do these numbers include Internet and corporate sales? That question was brought up in another forum and no one knew.

RE: Internet and Corporate Sales?

I.M. Anonymous @ 2/2/2002 5:42:42 PM #

No - NPD doesn't track non-retail. I don't think this even includes internet sales from Amazon and all the smaller places you find via www.pricewatch.com. Compaq has shipped close to 2M iPAQ's since launch, about 1.5M in 2001 - most direct or via the internet. Not at Best Buy or CompUSA.

And "Palm US Market Share Slips a Bit in 2001"

A BIT? Hello? From 71-58% - that is an 18% drop in share position. And their increase on units sold came at the expense of profits - average prices now well below $200 vs the mid $250 range in 2000. What a joke. Palm is dead. Only Sony can save the OS now.

RE: Internet and Corporate Sales?

I.M. Anonymous @ 2/2/2002 6:42:01 PM #

Thanks for answering my question. However, do you have any source for that? Does NPD estimate non-retail based on retail sales? Where did you find out that the majority of IPAQs were shipped directly or via Internet?

RE: Internet and Corporate Sales?

Ed @ 2/3/2002 10:30:34 AM #

> Compaq has shipped close to 2M iPAQ's since launch, about 1.5M in 2001

Sorry, you are off on Compaq's sales. It sold about a quarter of that number. According to recent figures for total numbers of handhelds shipped worldwide (not just retail sales), Compaq shipped 368 thousand handhelds last year. Palm shipped 1.63 million.

www.palminfocenter.com/view_Story.asp?ID=2870

> From 71-58% - that is an 18% drop in share position.

71 - 58 = 13

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News Editor