Palm is clawing back handheld market share from Pocket PC devices with its new Zire product which topped sales during the Christmas season.

Overall sales in the sector reached 20,000 units in December, according to latest figures from market analyst Inform.

The Palm Zire was the number one selling handheld product during December and made up 30 per cent of Palm’s total sales. Its price of $239 hit the sweet spot with many consumers, but Inform analyst, Luke Solyom, said the device had also sold surprisingly well in the business sector.

“The new Palm release undercuts the cheapest Pocket PC device by over $500,” he said in Inform’s weekly market report, Infocus.

“Whilst it’s true that this product is aimed at a different consumer subset, namely non-business users, the device is actually selling surprisingly well to the business demographic, being commonly utilised as a filofax replacement.”

Palm’s success with the Zire allowed the vendor to hold a 56 per cent market share. Recent price cuts to its corporate Tungsten T device will also push sales.

“Early indications for the month of January are that sales of this product may triple in response,” Solyom said.

Palm-based vendors have been able to take advantage of the cheaper cost of licensing the Palm operating system and pass on the cost savings to consumers, Inform said.

Additionally, the Palm OS does not require the same level of specifications on componentry. That will give HP’s iPAQ a run for its money.

The device currently holds a 21 per cent share of the market and is clearly the top selling handheld in the corporate sector. In December, half of all handheld sales by corporate were of iPAQ products.