Will Pocket PC Push Palm Out of Our Hands?

SAN FRANCISCO (01/25/2000) - Programmer Matt Osminer relies on his Windows CE-powered HP Jornada 430SE for everything from scheduling and note-taking to playing games and music, and he synchronizes it all with Microsoft Outlook.

Editor Judy Lewenthal turns to her Palm III to track her multiple deadlines and busy schedule.

They're typical users of each type of handheld device. Osminer wants a tiny PC, while Lewenthal wants a digital organizer.

So far, more than 80 percent of handheld customers are in Lewenthal's camp, voting with their pocketbooks for the Palm. Its name is synonymous with the market; even Microsoft Corp. and its hardware partners refer to "Palm-size PCs" in ads for devices that run Windows CE.

Microsoft expects to change that with the Windows Powered Pocket PC, which is its newest weapon in the handheld wars and a successor to Windows CE devices.

But does the 800-pound gorilla of software really understand what people want in a handheld--and how to snatch leadership from Palm Computing Inc.?

The Pocket PC concept made its debut at January's Consumer Electronics Show.

Microsoft is coy about releasing details, but it will bundle some applications, notably Windows Media Player and Microsoft Reader, which uses ClearType technology for better screen resolution.

Hardware vendors who promise to make sleek new Pocket PC units include Compaq, Hewlett-Packard, Casio, and Siemens. Expect the first designs before midyear, Microsoft says.

But Microsoft's handheld challenge starts with the names.

"Everyone refers to these as Palm Pilots, like everyone says Kleenex for tissues," notes Jill House, a research analyst with International Data Corporation.

Vendors of Windows CE devices concur.

"I've had a lot of difficulty explaining 'Palm-size PC'," says Kevin Havre, technology marketing manager for Hewlett-Packard's Jornada division. "People think it has something to do with the Palm OS. Palm is just an organizer; Windows CE is so much more than that."

Most Windows CE-based Palm-size PCs have faster processors and support multimedia, like MP3 and graphics. Microsoft expects to release Windows Media Player for Palm-size PCs in February.

Windows CE trims Windows to fit non-PC devices like set-top boxes, game consoles, projectors, and industrial controllers, which run things like gas pumps. But Windows CE has been criticized as too clunky for handhelds, while the Palm platform is designed for the small units.

Palms don't compete with Windows CE devices, Havre says. "They're different devices. It's like comparing sales of the Palm to that of the Rio players," he says.

But analyst House says the revised Windows CE that will power Pocket PCs is impressive and more competitive.

"It has nice implementation of different features," she says. "It's a lot easier to use and doesn't have as much the look and feel of a PC."

Still, developers have mixed reactions to the Pocket PC, says Jack Gold, senior program director at the Meta Group. "They're happy Microsoft is coming out with a platform that competes adequately with Palm, but on the other hand, they don't think it does it yet," Gold says.

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