From...

February 5, 1999
Web posted at: 3:10 p.m. EST (2010 GMT)

by Tom Spring

(IDG) -- Microsoft juiced up its Windows CE operating system Monday, adding color, hardware tuning, and a host of new bells and whistles. And Compaq, Hewlett-Packard, Casio, Philips, and others are ready to put the new software on their palmtop PCs.

The Windows CE upgrade promises to heat up competition between Microsoft and 3Com. Both make palmtop operating systems, but recently, Microsoft has been playing catch-up. 3Com holds 77 percent of the palmtop PC market, while Windows CE holds only 15 percent, according to International Data Corporation.

Analysts say the new Windows CE operating systems could erode 3Com's tight grip on the billion-dollar market for handheld PCs. The backing of powerhouse hardware vendors boosts Microsoft's threat, says Ken Dulaney, analyst with the Gartner Group. However Microsoft's latest offering doesn't address Windows CE's biggest flaws: It is too complicated and hard to use, notes Dulaney and other analysts.

"This market is not about who has got the latest technology and which device has the most functionality," says Seamus McAteer, an analyst with research firm Jupiter Communications. "PalmPilots are successful because they are simple and easy to use."

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Microsoft says it hopes the new OS will spur a new generation of palmtop games and Internet content. To encourage those applications, the updated Windows CE supports audio functions and CompactFlash slots.

Besides color, the systems that debuted Monday bring new hardware functions to the market. Some of the systems run on lithium-ion batteries and are said to operate for up to 10 hours.

Deluge of devices

HP jumped into the personal digital assistant realm with the Jornada 420 palm-size PC. The Jornada 420 ships with a 256-color display, transparent case, and a configurable start button; its estimated retail price is $519. The e-mail-ready, 8.8-ounce device uses the Windows CE operating system and is due out in mid-February. The Jornada 420 will support wireless information services, such as paging through Motorola's pager card.

Compaq is expected to announce a PDA this quarter, although the company declined to elaborate on system features. Independent reports claim the model will be called Aero 2100 and will include a color screen, 8MB of memory, four customizable launch buttons, left-hand scroll bar, and voice recording with integrated microphone and speaker.

Philips announced Monday that its Nino line will expand to support the latest Windows CE operating system. Everex is expected to launch a PDA of its own later this year, along with Casio who will offer a color Cassiopeia in the second quarter.

For its part, Microsoft is working with developers on a selection of "pocket applications," designed to run on Windows CE and synchronize with programs on larger units. Calendars, contact databases, an in-box, and task lists are the obvious first choices, notes Lily Li, product manager in Microsoft's consumer applications group. All CE devices are infrared-enabled and users can attach cables for synchronizing data.

"Palm-size applications will provide basic functions," Li says. The most sophisticated applications may be designed for vertical markets, she notes. The latest release of Windows CE supports Microsoft development tools such as Microsoft Foundation Classes.

Simplicity counts

For consumers, the choice between PalmPilot and Microsoft's Windows CE palm PCs may come down to the ease of use and popularity of the 3Com product versus the appeal and flexibility of Windows. At the moment, many market-watchers believe 3Com and its Palm Computing division have the upper hand.

3Com's "less is more" approach helped make palmtop machines popular, says analyst McAteer.

While other companies have churned out handheld computers with keyboards, more memory and more applications, 3Com produced a simple machine with a few basic but essential programs. Chiefly, they are a scheduler, an address book, a memo pad, and a to-do list. The units have no keyboard; users enter data by printing on a touch-sensitive screen with a plastic stylus. The system takes about an hour to learn. Simple, yes; and for the moment, that's quite effective.

PC World Senior Editor Peggy Watt contributed to this report.