Microsoft rebrands CE to boost sales

Microsoft has dropped the terms Windows CE and Palm PC in favour of the more consumer friendly Pocket PC brand, in its latest attempt to spur adoption of the operating system.

The Pocket PC brand will be used to describe the next generation of palm-sized PCs running Windows as well as the operating system they run - a modified version of Windows CE 3.0, codenamed 'Rapier'.

Analysts said the rebranding is an attempt by Microsoft to steer customer focus away from the term Palm, the name of Palm Computing's rival handheld OS, and to mask the Windows CE brand which has been damaged by below expectation sales.

Microsoft says the latest brand will help reduce confusion surrounding the role of Windows CE, which is used in numerous different environments including industrial machinery, cars, games machines, set-top boxes and palm-sized PCs.

"The generic Windows CE brand was creating some confusion. We've learned from that," said Dilip Mistry, marketing manager at Microsoft UK.

"Originally Microsoft wanted to capitalise on the Palm name, but it is now hurting not helping them. They don't want to draw attention to the Palm name," said senior Gartner Group analyst Michael Gartenberg.

"CE has become a bit of a liability for Microsoft. It certainly hasn't been associated with success for the company," he added.

Differentiating Pocket PC devices from their Palm rivals will be key to Microsoft's success in this field, according to Gartenberg. "This is clearly CE's last chance. If this next iteration fails, then CE's future in this type of device will be questionable," he said.

"In the past it's been about personal information management. In the future I believe these will become multimedia PCs in your pocket," said Microsoft's Mistry.

Two of the differentiators Microsoft is touting are multimedia and electronic book software. Pocket PCs will include the latest version of Windows Media Player which for the first time supports the MP3 format.

Microsoft Reader software will also be included, which uses 'easy to read' Clear Type technology for displaying electronic books on these devices. Barnes & Noble will sell downloadable e-books for use with the software.

Gartenberg said that while Microsoft has taken a lot of criticism for Windows CE, the hardware manufacturers should share the blame.

"CE was hampered by very poor hardware design," he said. "Prices need to be lower, battery life longer and devices smaller."