Microsoft Unveils Pocket PCs

Microsoft's new Pocket PC represents the company's third strike at the handheld device market, which Dataquest predicts will increase from $7.2 billion in sales in 1998 to $32.5 billion in 2002. In two previous attempts, Microsoft has failed to nab a healthy share of that market, mainly because its Windows CE operating system proved too large and slow for handhelds.

The Pocket PC, unveiled with great fanfare by Microsoft president and CEO Steve Ballmer at New York's Grand Central Station, runs a revamped version of CE—Version 3.0. The handheld features a personal information manager (PIM) that includes calendar, contacts, inbox, tasks and notes; a Web browser specially designed for handhelds; slimmed-down versions of Word and Excel; Windows Media Player; and Microsoft Reader, with Microsoft ClearType display technology. Those features pack some punch, allowing handheld users to keep appointments, play music files and surf the Web.

On hand for the big Microsoft announcement were hardware partners HP, Casio, Compaq and Symbol Technologies, as well as a host of software developers and other third-party vendors. The hardware manufacturers have given the handhelds some clout—the Pocket PCs feature 32-bit processors and 16 to 32 MB of memory. The vendors also are giving them a fairly reasonable price tags--$299 to $599.

HP's new Jornada 540 Series Color Pocket PCs fall at the higher end of the price range. The Jornada 540 and 545, featuring 16 MB of RAM and available now, are priced at about $499. The Jornada 548, boasting 32 MB of RAM and scheduled for availability in May, is priced at about $599. The Jornada 540s ship with MusicMatch digital management software, as well as Windows Media Player.

HP also is offering two wireless bundles for the Jornada 540s, both from Socket Communications. The Socket Digital Phone Card and cable, available now for about $150, connect a Pocket PC to a CDMA or GSM mobile phone to enable wireless Internet access, e-mail, message service, and remote access to organizational servers. HP says its future plans for the Jornada 540 series include Socket-developed wireless accessories for CDPD and GSM/GPRS networks and a CompactFlash Type I Bluetooth module to enable wireless access to the Internet from cell phones and connectivity to other Bluetooth-enabled devices.

Most industry observers view the Microsoft announcement as a direct challenge to Palm, whose operating system now runs in 80 percent of handhelds. Palm execs disagreed, arguing that the Microsoft products are priced higher than Palm's devices, which range from $159 to $449, and are, therefore, targeted at a different market. Palm execs also claimed victory in the user friendliness sweepstakes, contending that Palm handhelds can be used by people unfamiliar with Windows or, for that matter, with computers in general.