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And at the vanguard of the PDAs, HP grabs the lead off Palm with a staggering 87 per cent year-on-year growth for the third quarter, taking nearly a third of the market (31.1 per cent).

Meanwhile, Palm lost some 7 per cent of market share, although shipments were still up - the sector was up a third overall on Q3 2002.

Dell also entered the market, quickly grabbing 4.9 per cent with its aggressively priced Axim range.

'Palm usually performs well in Q4,' added analyst Rachel Lashford, 'So HP should not take this leadership position for granted, however, with the iPAQ h1900 and h2200 series, HP now has a

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much stronger consumer offering.'

The smart phone market also posted a healthy quarter, shipping 838,000 units - a 22 per cent increase year on year. While market leader Nokia only managed a 1 per cent growth, it still clung on to an 80.2 per cent share. Up and coming Sony Ericsson continued to make inroads, with a 14 per cent share and a year on year growth of 7,442 per cent. And you can expect Orange (with its SPV range) to post a similar yearly growth rate - it already boasts 5.3 per cent of the market (with no figures for the previous year).

Chris Jones, Canalys senior analyst and director, said there were a number of reasons why smartphones didn't show the same growth spurt as handhelds. 'Q3 last year was the first full quarter of shipments of the Nokia 7650. The overall market more than doubled then and we saw four quarters of tremendous year-on-year growth. We are now comparing like with like, and it is encouraging that the market is still posting healthy gains,' he said. 'Q3 this year was a quiet quarter for smart phone launches, with no new models that contributed significantly to shipments. Those that did appear, like the N-Gage and the Motorola A920, did so very late in the quarter.'