Move Over Notebook, Jupiter's Arrived

Electronic News, Nov 30, 1998 by Carolyn Whelan

Las Vegas-The star of an otherwise quiet Comdex show, at least in the handheld space, is Jupiter. Larger than a PDA and smaller than a notebook, the new form factor which uses Windows CE as its operating system (OS) provides much of the key functionality road warriors require. With small keyboards and larger displays than Palm-sized PCs, the new devices are better suited for type-centric functions like word processing, network access, web browsing, making presentations and minor transaction processing. As long as those programs can be synchronized to servers, many on-the-go workers may opt for the more travel-friendly product over PDAs or mini-notebooks. Companies like Oracle and Sybase developing smaller versions of their databases to do just that should help there.

Jupiter is an excellent opportunity for Microsoft. The company's Palm-sized PCs have not sold well, at least in comparison to 3Com's dominant share. Until now 3Com has dominated the handheld companion space, with 41.4 percent market share in 1H98, up 32 percent over the same period last year, according to the International Data Corporation (IDC).

Analysts blame slow buy-in on myriad software shortcomings never or rarely seen in PalmPilots. Experts say Pocket Outlook has a whole lot less features than the desktop version, at least in the Palm-sized PC. Also, viewing appointments can be difficult, and it's impossible to transfer contact information, appointments or tasks to another CE hand-held. Transfers can be slow and lock-ups are not uncommon. Voice recorders are said to be useless and drain battery power. Web browsing is limited. So in the Palm computing space, 3Com is likely to hold onto its share.

But, potentially, Jupiter poses a threat to the PalmPilot, if PDA users opt to upgrade to a notebook-like form factor. Around 17 percent of 600 hand-held users polled recently in an IDC survey said they wanted a "Super PC Companion" device, with Windows CE, a keyboard and larger display, and were seriously considering buying the forthcoming form factor.

"H/PC pro devices are designed to be desktop companions," said Diana Hwang, research manager for Smart Handheld Devices at IDC. "They do not serve well as a desktop or notebook replacement, but rather fill a need among desktop users wishing to gain mobility without the added cost of a notebook. They will eventually offer corporate IT a lower cost of ownership, and will become the secondary device of choice for many desktop users."

Their more friendly price tags (most hover around $1,000) and the lower TCO associated with the hardware-challenged products means that, over time, corporations, too, may set their sights on Jupiter products over other PDAs or even laptops, at least for employees that require only occasional mobility and basic capabilities. Nearly 60 percent of respondents to that same IDC survey said their company had paid for their PDA. And laptops are notoriously expensive and cumbersome to repair and upgrade.

Jupiter type products were initially written off as a niche product, falling somewhere between a laptop and scheduler and meeting neither fully. Those that took the product seriously thought it could only threaten the PDA market. But the latest version of Windows CE brings improvements in design and functionality, enough so that Jupiter could cannibalize notebook sales, at least the mini-notebooks. The 90 percent size keyboard and nearly-as-large display (now averaging around 9 inches, supporting 640x240 pixels) means that the form factor is not far off, at a much smaller size and lighter weight, eliminating most of the bells and whistles that most on-the-go workers no longer require or want. Improved E-mail access and browsing with Windows CE 2.0, more features and better device support could also help buy in. Some even say that as long as the OS continues to be tweaked, over time, it could replace Windows 98. Pocket versions of Word, Excel and PowerPoint, along with the capabilities to spellcheck, use folders, format paragraphs, make tables and change fonts are bonuses, too. Those features could lure in non-PDA users, who crave laptop functionality but have avoided a purchase due to their prohibitive price tags.

Priced between $1,500 and 2,000, today's low-end notebooks weigh around 6 pounds and typically feature 233MHz Pentium MMX, two gigabytes of storage, active-matrix displays, 32 megabytes continued on page 53 continued from page 52 of memory, built-in 56K modems and CD-ROM drives.

"They are potentially a threat to the biggest segment: mini-notebooks and the under $1,000 notebook," said Hwang. Current mini-notebooks on the market include Hitachi's VisionBook Traveler 600; Toshiba's Portege 3000 and MAG Portable's Tiny Note. "Still, there are issues, like security, and they won't overtake the notebook segment."

Even if they don't eat into that share too much, Jupiter will certainly give notebooks of all sizes a run for their money and shelf space. Support for printing, networking, color screens and VGA adapters help too. The next version of CE promises disk drives, parallel ports and support for other devices. Potentially, the products could bring down mini-notebook prices even more. Toshiba's 3000 Portege mini-notebook, which weighs only 3 pounds and is less than an inch thick, boasts 266MHz, a 3.8V lithium battery, an 80 percent keyboard, a 10.4-inch screen, a 4.3 hard drive, and a 56K PC card modem. All for $1,999. "Retailers love it: it's pushing other slim notebooks off shelves,' said Phil Torminio, a sales support rep at Toshiba.