Eyes on handhelds with, without CE

Electronic News, Nov 4, 1996 by Elaine Chen

New York--With all eyes at Comdex sure to be trained on the new handhelds using Microsoft's Windows CE platform, the veterans in the handheld computing arena are gearing up for new scrutiny--and new competition.

Under the Windows CE initative, Microsoft developed a 32-bit open, scalable operating system for handheld devices intended to provide easy synchronization with desktop Windows applications (EN, Sept. 23). An array of major vendors, including Casio, Compaq Computer, Hewlett-Packard and Philips, announced plans to develop products based on the Windows CE platform. While Microsoft is keeping a tight lid on product specs, products are expected to be priced in the $500 range, consistent with other high-end competitors.

Notably, many of the major players in the high-end handheld market, such as 10-year veterans Sharp Electronics and Psion or newcomer U.S. Robotics, either did not choose or were not chosen to participate in product development for Windows CE. With Casio's extensive product line primarily focused in the lower end, HP is the only company currently endorsing Windows CE which already offers a competing product. HP's existing entries in the handheld market include its 200LX Palmtop PC, which has business productivity tools and E-mail and is aimed at the business market, and the recently released OmniGo 120, which does not have E-mail capability and is designed for the consumer market.

While HP will not definitively state if it plans to move the DOS-based 200LX or the GEOS-based OmniGo to the CE platform or to discontinue either product, a representative stated that both will be shown at Comdex and indicated that the OmniGo, at least, could be viewed as primarily an organizer, which is not in direct competition with the forthcoming CE products. Currently, the 200LX is priced from $549 in a 1MB configuration, while the OmniGo 120 has a suggested price of $399.

Meanwhile, handheld veterans Sharp Electronics and Psion are staying with their proprietary operating systems for the time being. Mary Repke, marketing director for Sharp's Zaurus handheld, said that Sharp has no plans to switch at this time, noting that customers are "familiar with our platform" and that Sharp has spent "over 10 years developing our OS." Psion marketing director Kathy Mangila answered a question about switching to CE by saying, "We haven't seen it yet," but also said that Psion's OS has a "tiny footprint" as well as a large number of independently developed applications. However, both companies agreed that compatibility with customers' preferred platform is key.

While platform compatibility would seem to be CE's biggest strength, in reality most handhelds are compatible with popular Windows-based desktop applications. Windows synchronization "has to be there," said Psion's Ms. Mangila. Psion offers Lotus and Excel-compatible spreadsheets and a Microsoft Word-compatible wordprocessor on even its compact Siena model, which begins at $249 for a 512KB version weighing less than seven ounces. Both HP and U.S. Robotics also offer compatiblity with popular applications, with the 200LX bundled with Lotus, Pocket Quicken and cc:Mail Mobile, while the U.S. Robotics Pilot, which is predominantly an organizer, supports Lotus Organizer, Microsoft Schedule and DayTimer Organizer

Ms. Repke of Sharp agreed that users are demanding Windows compatibility. Sharp includes Microsoft Word and Excel-compatible applications on its entire Zaurus line, and with its Application Partner software, users can transfer files from Windows 95 and even NT systems to the Zaurus via a simple drag-and-drop. The newly introduced Zaurus 3000 is priced at approximately $399 with 1MB memory in a 10.7-ounce form factor, while Microsoft Mail and cc:Mail access software is priced at $79 each for a single user. Both the Zaurus and Psion's Siena will be on display at Comdex.

Despite the new competition, handheld vendors nevertheless believe that Windows CE will definitely help the small but growing industry. Ms. Mangila said that Microsoft's interest "gives credibility to the category," while Sharp's Ms. Repke agreed, stating, "If anything, (Windows CE) is just adding a lot more visibility." According to International Data Corp. (IDC) senior analyst Diana Wong, U.S. sales for handheld computing devices, excluding organizers and companion devices like the Pilot, will grow by a healthy 21.9 percent average each year to total 1.3 million by the year 2000, as compared with 581,000 units for 1996. Ms. Wong also predicts that Psion and Sharp will bear up against the CE challenge, noting, "These guys have a loyal base right now."

At Comdex, industry observers said they would be looking for wireless connectivity solutions, which Ms. Mangila described as "one of the most exciting things happening right now." Wireless modems would permit users to access E-mail anywhere, and could be the value-add to spur volume sales for the category. While devices will concentrate on core features for now, which according to Sharp's Ms. Repke include, "a combination of word processing, Excel...and E-mail compatibility," other features may include faster processors, voice recording and new methods of inputting data.