Loosening Palm's Grip

Microsoft's Pocket PCs boast enough features to grab lots of handheld share

Why do people buy handheld computers? For the past four years, the overwhelming answer has been "to keep track of my calendar and contacts." And the Palm family of handhelds has used superb contact and calendar management to gain more than 70% of the market.

Microsoft Corp. and its hardware partners are betting that buyers are hungry for more, including games, music, and other entertainment features. So they're taking one more stab with a new line of Pocket PCs, based on Windows CE software.

Microsoft has boosted the chances of the new handhelds with two important concessions to reality. Developers realized that the miniature version of desktop Windows screens that characterized earlier models only annoyed users. The Pocket PC offers simplified menus and a much cleaner screen. Second, Microsoft has given hardware makers Hewlett-Packard, Compaq Computer, and Casio Computer far more freedom to design their own devices. The new designs are both simpler and more attractive, with the HP Jornada 540 bearing a striking--and not accidental--resemblance to the Palm.

In the core calendar and contact functions, the Pocket PC is now a match for the Palm. The big difference is that while Palm models synchronize with the minimal but easy-to-use Palm Desktop, Pocket PCs work with the bulky and complex Outlook 2000 for Windows. The Pocket PC meshes well with other parts of Microsoft Office, letting you create or edit Word documents and Excel spreadsheets, not just view them, as in earlier versions.

The Pocket PC's features become more striking the further you move away from the Palm's traditional strengths. All Palms have a 160-by-160 pixel display, monochrome on all but the new Palm IIIc. The Pocket PCs boast 240-by-320 pixel screens in vibrant color. That doesn't make much difference in a calendar, but the better displays, combined with a speedy new generation of processors, make the Pocket PC an interesting game platform (including a nifty 20th anniversary revival of Pac-Man). And judging by what I've seen on airplanes, traveling execs are about as likely to use computers to play games as they are to do e-mail or spreadsheets.

Another entertainment aspect of the Pocket PC is the new Microsoft Media Player, which turns the device into a nice digital music player. Although it uses Microsoft's Windows Media (WMA) format instead of the more popular MP3, the effect is much the same, and you can easily convert music to WMA with desktop software.

The HP Jornada 540 series is the sleekest of the new products. It's about the size of a Palm III, though it's 50% heavier at nine ounces. The screen is bright and sharp, and the controls--four Palm-like buttons giving quick access to applications and a rocker switch that can be used to scroll pages--are well laid out. The Jornada, which starts at $499, has a Compact Flash slot that can be used to hold extra memory or a variety of communications devices, including a 56K modem, an Ethernet card for direct connection to networks, or a card that allows communications via cell phone.

THICK AND HEAVY. The $499 Compaq iPAQ Pocket PC is substantially thinner and three ounces lighter. But you lose that advantage if you want to use an add-in card, since that requires sliding the iPAQ into an expansion unit that makes the device about as thick and as heavy as the Jornada. An expansion unit for Compact Flash cards is a $39 option, with one for PC Cards that's $149.

Casio, which is aiming mainly at consumer markets rather than the corporate buyers targeted by HP and Compaq, will ship a Pocket PC in the same general design as the existing Cassiopeia E-105, with a redesigned version due later in the year.

Corporate info-tech departments like handhelds based on Windows CE largely because they can develop custom applications using familiar Windows tools. But they've had a tough time getting their own execs to part with Palms, which they often purchased on their own. Microsoft is betting that richer applications--and a big dose of entertainment--will change that. Chances are that Palm is in for its first real competition.

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