Hand-held growth to be same as in 2001 Less than one--sixth the 2000 pace: report

Hand-held computer sales will rise 18 percent this year, the samepace as 2001, as a slowdown in spending by consumers and businessesholds growth to less than one-sixth the pace of 2000, a report said.

Shipments of the pocket-sized computers made by companiesincluding Palm Inc., Hewlett-Packard Co. and Research in Motion Ltd.will rise to 15.5 million this year from 13 million in 2001,according to a research report from Dataquest, a unit of Gartner Inc.About three-quarters of the so-called personal digital assistants arepurchased by consumers.

"To a slight extent, there is some saturation in the market," saidTodd Kort, an analyst with Dataquest. "A lot of people who areinterested in PDAs already own one."

The growth of hand-held computer sales has slowed since more thandoubling in 2000 as the U.S. economy moved toward its first recessionin a decade, trimming demand for electronics. Sales are expected toaccelerate in 2003 as consumers buy faster, higher-resolution modelsand businesses invest more in computer equipment for their employees,according to Kort.

"We expect that corporate spending will pick up in the second halfof the year and into 2003," he said.

Spending on the devices will rise by more than 20 percent to $4.6billion in 2002 due to sales of higher-priced models with colordisplays, more powerful processors and greater storage capacity,according to the Dataquest report. Sales totaled $3.8 billion in2001.

Sales at Palm, the largest maker of hand-held computers, havedeclined during the last four quarters.

Palm this year will deliver a new version of its operating systemto computer makers such as Handspring Inc. and Sony Corp. to competewith Microsoft Corp.'s Pocket PC, which is used by Hewlett-Packardand Compaq Computer Corp. The new system could fuel demand in thesecond half of 2002 by expanding the capabilities of Palm-baseddevices, Kort said.