Microsoft, Allies Launch Pocket PC Handhelds

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SAN FRANCISCO (Reuters) – Microsoft Corp. and major computer companies on Thursday unveiled a passel of handheld computers in a marketing blitz to woo business users and establish the operating system as the dominant platform for portable computing. Compaq Computer Corp., Casio Computer Co. Ltd., Toshiba Corp., and others unveiled new devices designed to run on Microsoft’s Pocket PC 2002 operating system. The new handheld computers join models from Hewlett-Packard Co. announced last month. The Pocket PC 2002 system is an attempt to win new customers in the business market by offering support for wireless networking and improved security — areas that Microsoft sees as having been neglected by industry-leader Palm Inc. “We’re focused on mobile professionals,” said Ben Waldman, vice president of mobile devices for Microsoft. Microsoft CEO Steve Ballmer said the New Handhelds would function as both phones and entertainment systems as well as computers. “Each one needs to be a general purpose communications device,” he said. Retail prices for devices running Pocket PC 2002, an update to software released 18 months ago, range from $499 for Compaq’s iPaq H3670 to $649 for the iPaq H3870 and the Hewlett-Packard Jornada 568. In total, Microsoft said 22 hardware vendors had signed on to support Pocket PC 2002, which the company is touting for both its business functions and its multimedia applications, including a streaming audio and video player. Compaq unveiled a number of add-on modules for the new iPaq series, including a sleeve that will turn the device into a tri-band GSM cellular phone and wireless Internet terminal. That sleeve is expected to be available in December. The new version of the operating system also allows users to connect to corporate networks, control desktop computers remotely, read electronic books, and run a new spellcheck function in the Pocket Word program. In a demonstration, Microsoft used a Pocket PC as a telephone as well. Palm Inc. took the world by storm with its easy to use devices that recognize handwriting, but it has failed to make inroads into the corporate market for handheld devices. Microsoft, updating its third try at competing system, is gaining ground, companies and analysts say. Palm, however, said it was still far ahead and that Microsoft was changing tactics from when it launched the Pocket PC a year and a half ago. “Having failed to make a significant dent in us in the mainstream market for handhelds, they now say that they are going after the enterprise market,” said Palm’s chief competitive officer, Michael Mace. Palm says it has more programmers and more programs. “So if you are an enterprise and looking for versatility, its Palm, its not Microsoft,” Mace said. But networking company Symbol Technologies Inc., which has just introduced a card that fits in a CompactFlash memory expansion slot and hooks the Pocket PC into wireless networks, says Palm’s dominance is waning. Information technology, or IT, technicians who run corporate networks prefer Microsoft’s industrial strength support and have a clearer idea of where Microsoft products are headed, said Chris Ciervo, direct of mobile computing systems marketing. “We are beginning to see a little bit of a slide, if you will, in Palm versus Pocket PC.” Research firm IDC released a report saying that Pocket PCs were gaining ground in its bid to overtake Palm in the market for handheld devices, which it projected would be worth $6.6 billion by 2005. IDC said that while Palm devices still accounted for almost 60 percent of purchases by business, the popular iPaq handhelds by Compaq were at 30 percent market share and showing signs of rising. Among the biggest corporations, IDC said more are leaning toward supporting Pocket PC than Palm OS devices. “Palm’s pervasiveness gives it a default position in the enterprise, but Pocket PC vendors look poised to make gains,” the research firm said. Toshiba Corp., whose U.S. division will launch its first Pocket PC device next month, will not even offer the $569 handheld to consumers, at least in the beginning. In contrast to the previous generation of Pocket PC handhelds, all of the Pocket PC 2002 devices unveiled on Thursday have uniform display, processor speed, and memory standards. The units all run on the same processor: Intel Corp.’s StrongARM, running at 206 megahertz. They all have reflective thin-film transistor (TFT) screens with 240×320 pixel resolution displays, and 32 megabytes of read-only memory. Most of the devices will launch between Thursday and the end of the year.

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