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Microsoft has overtaken Sunnyvale's PalmSource as the top handheld-computer software maker for the first time as the former market leader focused on the growing smart-phone business, a research firm reported Friday.
PalmSource's Palm OS operating system saw its share of the worldwide personal-digital-assistant market plummet to 29.8 percent, with 851,000 shipments in the third quarter, from 46.9 percent, with 1.2 million shipments, in the same period last year, according to Gartner.
At the same time, Microsoft's Windows Mobile operating system captured 48.1 percent of the PDA market with 1.4 million shipments in the third quarter, up from 41.2 percent with 1 million shipments a year ago, Gartner said.
`They've dominated the market ever since 1996, and this is the first time they've been passed,'' said Gartner analyst Todd Kort. He said a decline in Palm OS shipments was expected in the third quarter, "but not of this magnitude.''
PalmSource called Gartner's findings misleading. Michael Mace, the company's chief competitive officer, said the report covers only software shipments for PDAs and excludes sales to makers of smart phones, which combine wireless-phone and PDA features and use the same operating system.
``Because Gartner doesn't track those numbers, we feel like we're being punished for our success in smart phones,'' Mace said. ``We've been doing a really good job in smart phones.''
The report also reflects worldwide rather than domestic sales, where Palm still leads, Mace said.
 News source: Mercury News
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