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11/96 Analysis: Explorer

Microsoft Eyes A Very Small Market -- PDAs dont need a new OS, but they're getting a new version of Windows anyway.

By Mike Elgan

CALL IT WINDOWS Lite. Call it Microsoft's latest ploy to dominate yet another computing platform. Or just call it Windows CE. That's what Microsoft is calling the slimmed-down version of Windows for hand-held computers, formerly code-named Pegasus.

Microsoft's hand-held OS enters a small market already crowded with a variety of innovative, inexpensive and Windows-compatible PDAs (personal digital assistants), which keep your schedule, contacts and other data. Does this field have room for Windows CE? And, if so, what's in it for you?

I believe Windows CE will make it. Its success will bring industry attention, more users and real standards to the sleepy PDA market. That means you'll enjoy better devices, plenty of applications and lower prices.

Based on the Win32 API set, Windows CE supports a black-and-white 480x260 screen and features code that automatically synchronizes hand-held data with a Windows PC. (CE, by the way, originally stood for consumer electronics. Microsoft now says it doesn't stand for anything.)

Microsoft won't make the hardware. Instead, Casio, Compaq, Goldstar, Hewlett-Packard, NEC, Philips and others are working on Windows CE devices. I've also heard reports of a Korean Windows CE device from LG Semicon called Multi X, which is supposed to be a tiny combination pager, cell phone, fax machine and electronic organizer. Microsoft is apparently involved in importing the unit to the U.S.

Typical units will have 2MB of RAM, 4MB of ROM, a Type II PCMCIA slot, a serial and infrared port, and both a pen and a keyboard. Many will be available in time for the holiday shopping season for about $500.

Besides holding your calendar and some quickly jotted notes, Windows CE can read and write native Word and Excel documents, and run third-party apps. Eventually a Windows CE device should enable you to surf the Web, and send and receive e-mail and alphanumeric pages. Microsoft is also planning to add handwriting recognition.

The Windows CE PDA is not without competition, including some great devices with most or all of its features:

These are just a few of the products available. More are on the way.

Corel CEO Michael Cowpland told me his company will introduce a hand-held device with a Java-based OS by next March. You'll use a pen to browse the Web via a built-in, 28.8 modem. Offline, you'll navigate Java applets stored in RAM. I have a feeling Corel isn't the only company planning to introduce browser-based, platform-independent hand-held devices next year.

Windows CE will also have to compete with literally dozens of vendors that sell really cheap ($50 and up) organizers. They don't do much, but they're small enough to fit in a shirt pocket and they can still exchange schedule data with Windows PCs.

The slightly-bigger-than-pocket-sized computers, such as the Apple Newton, Sony Magic Link, Motorola Envoy and Marco, and many others, are also alive and maturing. For their $750 starting price, they offer bigger screens, wireless messaging and really cool interfaces.

Judging from this list, it would seem the competition in this market is keen. But the history of the PDA category is largely one of market failure and dashed expectations.

Though in many ways a fantastic device, the Newton was too big and too expensive. Doonesbury cartoons mocked its supposed poor handwriting recognition. It was introduced with great fanfare, but was a major market flop.

Ditto for all other major devices. Again and again, companies have suffered low market acceptance of their innovative new PDAs.

Even Microsoft has experienced a high-visibility PDA failure. Two years ago, the company stopped working on a hand-held OS called WinPad. The initiative had gained industry support from HP, Toshiba, Compaq, AST and others. A WinPad desktop component was to ship as a standard part of Windows 95. The project-and the alliances-fell apart after Microsoft realized it had underestimated hardware requirements and overestimated consumer demand. Nobody wanted another Apple Newton. Little of the original WinPad code survives in Windows CE.

Still, I'm convinced Windows CE will succeed. Hundreds of millions of people will one day carry general-purpose "Wallet PCs." These devices will combine cell phones, pagers and wireless e-mail boxes, remind us of appointments and hold our "digital cash."

This huge potential market will enrich whichever company dominates it. That's why so many big names in the industry, including Microsoft, want to get into it now.

Believing fervently in this lucrative future market, Microsoft will keep throwing money and programming talent at Windows CE indefinitely, regardless of how early versions fare in the market. Eventually-maybe next year, maybe in five years-Microsoft's legendary marketing skill, cash and ability to create wildly popular operating systems will probably make Windows CE devices the hand-helds of choice for most PDA buyers.

Mike Elgan is Editor of WINDOWS Magazine. For contact information on all the companies mentioned in this article, and for more information on Windows-compatible PDAs, point your browser at

Mike Elgan's e-mail ID is:

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