A report by research firm IDC reveals 3Com's Palm will remain market leader in the PDA arena, at least until 2002 when Psion's EPOC will slip dramatically. Palm top computing is one of the most bitterly fought markets and projections show 3Com's market share in Europe -- currently 39.2 percent compared to Microsoft's WinCE at 16 percent -- will continue to dominate through 2000 and 2001, despite claims from Microsoft last month that WinCE was the European palmtop OS of choice. IDC analyst and author of the report, Alison McKenzie, predicts Palm's share will drop to 30.8 percent share in 2002 with Microsoft closing the gap at 27.9 percent. By 2003 McKenzie predicts Microsoft will overtake Palm with a virtual swap in figures: Microsoft's Win CE at 30 percent Palm falling to 27.7 percent. Psion's EPOC operating system will fall from 23.5 percent market share this year to 13.8 percent by 2003 according to McKenzie. Windows CE group product manager Greg Levin said last month that CE products were outselling Palm devices in France and Germany by three to one and that CE would outstrip 3Com's Palm by 2000. 3Com's Palm product manager Jean-Baptiste Piacentino described the claim as "completely false" and gave no ground to Microsoft despite the IDC figures. "Forecasting beyond three years in an emerging market is very risky," he said. He remains convinced Palm will still be a market leader in 2003. Another Windows CE product manager, Dilip Mistry, is sure it will not. He accused 3Com of relying on an outdated operating system and not keeping in touch with consumer demands. "The software hasn't changed at all but consumer expectations have," he said. According to Mistry consumers now want stereo quality sound and video on handhelds and is doubtful Palm will offer it. Last month Levin claimed Microsoft had taken apart the operating systems of both the Palm and the Psion series 5 and found neither could support quality sound or graphics.