Windows CE has become the most popular PDA operating system, passing the Palm OS for the first time.

Worldwide shipments of PDAs using Microsoft's system were just under 1.4 million in the third quarter of 2004, according to Gartner. PalmSource's Palm OS came in at just 850,000 - down an incredible 28 percent from the 1.2 million sold this time last year.

As such, Microsoft has nearly half the market - 48.1 percent - while Palm's share has dropped from 46.9 percent to 29.8 percent. This happens despite the fact that Palm still have far more applications than Microsoft's PDAs.

PalmOne continues to be the top device vendor, but its market share has dropped from 34 to 26 percent in the last year. Gartner said it had been expecting a decline in Palm OS shipments, but not one of this magnitude.

The total PDA market was up 13 percent from last year's numbers, with 2.9 million units shipped during the quarter. Gartner's PDA numbers did not include smart phones such as PalmOne Treo 600.

Confusingly, the figures are completely at variance with IDC's from six weeks ago, which showed an eight percent fall since last year. Both IDC and Gartner exclude smartphones from their PDA figures.