Compaq Computer Corp, which is being acquired by Hewlett-Packard Co for US$20.2 billion, will take the lead in hand-held computers from Palm Inc in about two to three years, an executive said.
Compaq is targeting the hand-held computers for commercial uses by doctors, pilots, restaurant workers and even US soldiers fighting in Afghanistan while Palm is selling hand-helds as organizers to consumers, said Mike Winkler, executive vice president of Compaq's Global Units.
"That's where the true power is, not in a commodity organizer like Palm's," Winkler said in an interview. "The kind of applications that you see [being used for business] will dwarf the consumer organizer market."
Compaq said it has shipped 2 million Ipaq Pocket PCs since it introduced them two years ago. Palm's market share fell last year to 39 percent from 50 percent, as shipments fell 9.5 percent to 5.05 million, marketing research firm Dataquest Inc said.
Compaq's market share doubled to 9.8 percent last year when it shipped 1.28 million units.
Ipaq generated US$160 million in revenue for Compaq in the first quarter. Palm's computer unit had sales of US$284.9 million in its fiscal third quarter, which ended March 1.
Shares of Palm fell US$0.04 to US$3.64 Friday and have declined 53 percent in the past year. Compaq shares rose US$0.31 to US$11.13 and have fallen 49 percent in the past year. H-P shares climbed US$0.49 to US$18.69 and have dropped 42 percent in the past year.
H-P's own hand-held model, the Jornada, has also increased its market share to 5.4 percent, compared with 4 percent in the prior year.
Winkler, who will become executive vice president of worldwide operations in H-P, declined to say which brand will survive in the combined company. He said he's "comfortable" with predictions from analysts that Ipaq will survive because of its market share lead over Jornada.
"You would think it wise to keep the market leader," he said.
Both the Ipaq and Jornada run on Microsoft Corp's operating system, which has 21 percent of the worldwide market. That compares to 57 percent running on Palm's operating system.
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