Microsoft poised to challenge Palm

Microsoft will this week unveil a range of handheld organisers running its Pocket PC operating system at simultaneous events in London and New York.

The software giant will launch the latest version of its Windows CE handheld operating system, called Pocket PC, on Wednesday.

On the same day, manufacturers including Hewlett Packard, Compaq and Casio will launch devices based on the operating system.

Some analysts predict that Pocket PC will reduce Palm's 80 per cent share of the handheld market because it includes a full Internet Explorer browser with Secure Sockets Layer (SSL) security protection. The devices also come with industry-standard expansion slots for use in extending storage and connectivity.

Jill House, an analyst at researcher IDC, said: "These devices are a better iteration than the last ones. This third release of Windows CE is a charm."

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. House said that both companies have great opportunities to increase their market.

Microsoft's handheld devices include Outlook for scheduling and organising contact information, and software for playing music and reading books downloaded from the internet. The devices will also have word processing and spreadsheet software.

The software giant is also expected to announce Microsoft Network Mobile for Pocket PC with wireless internet access services provided by Nextel Communications and Verizon Wireless, although it would not confirm the partners.

IBM said it has developed a postage stamp-sized hard drive for use in the Pocket PC hardware. Big Blue will initially offer a 340Mbyte micro miniature hard drive and will release a 1Gbyte drive later this year.