InformationWeek: The Business Value of Technology

Palmtops running the 4-year-old Windows CE operating system bombed because they were too large, too power-hungry, and too expensive. Microsoft claims only about 15% of personal digital assistant sales; Palm Inc. owns nearly 80% of the market.

Enter version 3 of Windows CE for handhelds--dubbed the Pocket PC--slimmed down to run on smaller, more power-efficient hardware. Upgrades and new features in version 3 include easier synchronization of the Pocket PC's E-mail and contact-management application with Microsoft Outlook on a PC; a Pocket Internet Explorer that displays Web pages that fit on PDA screens; menus at the bottom of the screen; the first shipping version of Microsoft's ClearType software for improved legibility of text on a computer screen; and the ability to play MP3 files and games, including Pac-Man.

In introducing the devices last week, Microsoft president and CEO Steve Ballmer said, "I absolutely regret that we're not farther ahead in the market." Pocket PCs from Compaq and Hewlett-Packard are available now; a color-display model from Compaq and devices from Casio and Symbol Technologies are due in June. Pricing for Pocket PCs ranges from $300 to $600. The color Palm IIIc sells for about $450.

Symbol, which makes rugged, industrial-grade handhelds for business customers, has relied on DOS and Palm OS devices, but will include Windows CE in its lineup to exploit the Pocket PC's better performance and Internet capabilities. "Getting Web content on the screen has been a challenge," says Symbol VP of product management Vinny Luciano.

Starwood Hotels and Resorts Worldwide Inc., a $3.86 billion hotelier in White Plains, N.Y., plans next month to replace older CE devices with Symbol Pocket PCs for a pilot housekeeping application. Starwood also runs a check-in/check-out system on Palm Pilots.

Windows CE's biggest drawback to date? Short battery life, says Danny Hudson, Starwood's VP of distributed systems. "When you're walking around a building on a regular basis, you don't need to be putting the unit back into a cradle every few hours," he says. "We can get a full eight-hour work shift out of the Palm."