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The cuts come amid a slump in the handheld industry; shipments in 2002 dipped about 9 percent to 12.1 million units, compared with 2001, according to Dataquest, a unit of research firm Gartner. The Palm operating system still dominates the handheld market and is used in 55.2 percent of units shipped, or 6.7 million handhelds. About 25.7 percent of handhelds shipped, or 3.1 million units, use Microsoft's Windows CE operating system.