August 19, 1999 Web posted at: 12:03 p.m. EDT (1603 GMT) by Mary Lisbeth D'Amico

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MUNICH (IDG) -- The market for smart handheld devices in Western Europe should begin to grow steadily next year and more than triple from its current size by 2003, according to a new report by International Data Corp. (IDC).

In a report called "Western European Smart Handheld Devices Review and Forecast, 1998-2003," IDC predicts that some 7.2 million such devices will be shipped in Western Europe in 2003.

The lion's share of these devices will be what IDC calls smart phones, mobile phones that can transmit data and graphics as well as voice. The research company predicts that about 2.9 million smart phones will be shipped in 2003, compared to 347,000 units by the end of 1999.

Behind that come personal companions with 2.3 million units shipped, followed by the slightly more powerful PC companions with 1.4 million units. Lastly come vertical applications devices, used with industry-specific applications, such as for a doctor who needs to remotely access a patient's medical records. IDC expects 626,000 of these devices to be shipped in 2003.

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The smart phone market is expected to take off much faster in Europe than in the U.S., according to Alison McKenzie, research manager in charge of IDC's smart handheld devices group in London. The GSM (Global System for Mobile Communications) standard is used throughout Europe, making it a much less fragmented market for mobile communications than the U.S., and mobile phone penetration is particularly high in Northern Europe.

In 1998, vendors shipped some 1.4 million smart handheld devices in Western Europe, a number which did not live up to market expectations, McKenzie said. In the area of personal companions, vendors such as Compaq were slower to roll out models than expected, as they struggled with issues related to Windows CE, Microsoft's operating system for handhelds.

"Windows CE was not meeting requirements, it was said to be too complex and too robust," for handheld devices, McKenzie said. There were also problems with synchronizing files between handhelds and PCs.

Growth in smart phones has also been stymied by a lack of appropriate handsets and technologies, McKenzie said. The smart phone market will only take off when technologies such as GPRS (General Packet Radio Service) are implemented in mobile networks, enabling faster transfer rates of data via mobile phone, she said.

Market demand is expected to increase at the end of this year and into next year due to the introduction of phones using the new WAP (Wireless Application Protocol), which allows Internet content to be tailored for display on mobile telephones, pagers and other wireless devices, as well as of devices which incorporate EPOC, the operating system for wireless devices from the Symbian joint venture.

Mary Lisbeth D'Amico is the Munich correspondent for the IDG News Service.