Microsoft picks Pocket to beat Palm

Microsoft this week officially unveiled its Pocket PC operating system and showcased manufacturing partners with which it hopes to take on handheld rival Palm.

The Pocket PC operating system replaces Windows CE and represents the software giant's third attempt to muscle into the personal digital assistant (PDA) market.

Features like an Internet Explorer browser, slimmed down versions of office applications and support for industry standard expansion slots for use in extending storage and connectivity have been added to the OS.

These expansion slots will allow connections to devices like printers, modems and digital cameras.

Microsoft's ClearType technology to read books and a media player for audio and video files - including MP3 - have been added to entice consumers.

Through these features, Microsoft hopes to erode Palm's 80 per cent share of the handheld market, and move away from the perception of Windows CE as a slow and cumbersome operating system.

"With the Pocket PC, we're breaking out of the confines of today's electronic organisers," said Brian Shafer, Microsoft's marketing manager for mobile devices. "Other devices are good for things like contacts and calendars, but if you want to access the web, listen to music or get some real work done, they run out of steam pretty quickly."

Catherine Pennington, research analyst at IDC, said Microsoft had a history of getting things wrong when it first enters markets, but had now come up with an operating system that would compete with Psion and Palm.

"Pocket PC seems quite promising. It is less bulky and more tailored than Windows CE. Microsoft have simplified its operating system and made it more tailored, with a simplified menu system and added logos," said Pennington.The code has been rewritten from scratch, and was developed in close co-operation with Microsoft's hardware and software partners.

Manufacturers including Hewlett Packard, Compaq and Casio today announced devices based on the operating system. Wireless multimedia capabilities for the Compaq and Casio devices will be developed by software vendor PacketVideo. The devices are expected to go on sale from the middle of May.

IDC said Palm held 83.5 per cent of the US handheld market in 1999, compared with Windows' 9.8 per cent. The researcher predicts that Pocket PC will hold 40 per cent of the US market in 2003, compared with Palm's 57 per cent.

In Europe, Palm has a 40 per cent market share, while Psion's Epoc software accounts for 28 per cent and Windows CE for 27 per cent, according to IDC.