Compaq announced this week that its popular iPAQ Pocket PC line has sold more than 2 million units, making it the most popular Windows-based handheld computer on the market and the company's fastest-selling computer product ever. Compaq credits the iPAQ's success to its wide range of functionality and popularity with corporations, one market that Palm hasn't been able to crack. However, the iPAQ still trails market-leader Palm by a wide margin: Palm has sold more than 17 million handheld devices.

"During the first quarter, iPAQ unit shipments increased 14 percent and revenues increased 18 percent from the previous year," said Compaq Executive Vice President Peter Blackmore. "But the more important measure is the tremendous 'pull-through' effect as the iPAQ drives revenues several times that with related hardware and services. Again and again, Compaq's ability to deliver innovative handheld technology solutions is proving a key to winning large, multiyear tenders to deliver complete, integrated solutions for global companies and other major organizations."

Despite its lofty position, Palm's share of the handheld market continues to shrink. The company ended 2001 with 39 percent of the market, compared to 50.4 percent in 2000. However, its 5 million sales in 2001 are greater than the combined sales of all Pocket PC devices, including models from Casio, Compaq, Hewlett-Packard (HP), and other vendors.