Palm, the undisputed leader in handheld sales, is slowly seeing its once unquestionable dominance in the market erode. Rival companies, some featuring Palm's own OS and others featuring Microsoft's Pocket PC OS, have begun to take a piece of the precious market.

According to results reported by NPD Techworld Palm's unit share of the U.S. handheld market dropped down to 58 percent from 71 percent the previous year. Palm's licensees had slight increases during 2001. Handspring's share grew to 15 percent from 14 percent, and Sony's share reached 6 percent from less than 1 percent.

In the Pocket PC camp Compaq Computer's market share grew to 7 percent in 2001, a sizeable jump from 2 percent it captured the previous year. And Hewlett-Packard, bolstered by sales of it's revamped Jornada line saw its share climb to 5 percent last year, a two percent increase over the year before.

What do all these numbers mean? Well that depends on who you talk to. My opinion is that these numbers mean very little. I think it is healthy for there to be a competitive market as long as all the players are able to produce worthy products. Also, I look to other numbers such as revenue, repeat buyers, buyers switching platforms, etc. when looking for the hard truth about who's winning this war. At this time Palm is still winning, but time will tell if Palm has made the right moves in the last few years to continue to lead this market in the time to come.