The global personal digital assistant (PDA) market, battered by low consumer confidence and a drop in Chinese sales, declined 7 per cent in the second quarter of 2003 compared to the same period last year.

Analyst Gartner found that Palm OS-based PDAs just hung on to account for the majority of sales, with a 51 per cent share of worldwide PDA shipments.

Pocket PC PDAs accounted for 36 per cent of total units.

In terms of end-user spending, PalmSource licensees accounted for 41 per cent of the $827m (£519m) spent on PDAs in the second quarter of 2003, compared with 48 per cent spent on Microsoft Pocket PC PDAs.

The 66 per cent higher average selling price of Pocket PCs accounted for the difference between unit and dollar shares, Gartner explained.

"It is critical for Palm to hold its ground while waiting for the launch of Palm OS 6, which is expected in early 2004," said Todd Kort, principal analyst for Gartner's computing platforms worldwide group.

"OS 6 should put Palm on a more even footing with Microsoft as wireless PDAs gain acceptance in enterprises in 2004."

Palm experienced a 15 per cent increase in shipments from a year ago, and held on to the top spot in the worldwide rankings with 38 per cent of PDA shipments.

Hewlett Packard (HP) remained in the number two position with 15 per cent of the market, even though shipments were down 10 per cent.

Research in Motion moved into the top five worldwide with market share of 5 per cent, up from 2 per cent a year ago.

"The Palm Zire 71 was by far the best-selling PDA on the market, and the new Tungsten C was also well received, which helped Palm maintain its solid leadership position" said Kort.

"While HP's shipments were down, a good portion of their decline is attributable to shipments cutbacks in anticipation of the launch of five new models following the introduction of Microsoft's Windows Mobile 2003 operating system."