Three years after their introduction, tablet PCs have settled into a small niche serving people who regularly take notes or fill out forms while on the job. Now Microsoft and system vendors are working to improve the machines, making them more useful in their current markets and perhaps expanding their use into new ones.

Sales of the pen-based computers, which let users write text or issue commands with an electronic stylus, are set to increase 88% this year to 1.2 million units, according to market researcher IDC. Yet they'll remain just 2% of the overall notebook market. Use has been limited to markets such as health care, pharmaceutical sales, manufacturing, and education. Consumers, meanwhile, have shown little interest in tablet PCs. The devices run a version of Windows and are expensive (often costing $2,000 and up), bulky, and heavy compared with traditional notebooks, and their software can be hard to use.

	Windows Vista will bring improvements to tablet PCs, according to Microsoft.

Microsoft's decision to separate its tablet technologies from development of the most widely used versions of Windows has been partly to blame. "Tablet PC was a separate effort," says Rob Enderle, principal at IT consulting company the Enderle Group. "It wasn't getting the right level of company support." One result has been incompatibility problems. For example, the "digital ink" technology that's key to writing documents and E-mails on tablets isn't easily recognizable by most desktop and notebook PCs.

Early results from efforts to resolve some drawbacks of tablet PCs will appear in new tablets hitting the market in the coming weeks: They're a bit cheaper and support a wider range of interaction. Some models let users trigger functions by touching the screen with their fingers instead of a stylus. A new ThinkPad from Lenovo Group Ltd. weighs in at a pound lighter than competitors' products that convert to regular laptops--a big plus for a machine that people carry around all day. And Windows Vista, the version of Microsoft's PC operating system due next fall, will let virtually all workplace desktops and notebooks that run it recognize digital ink messages and annotations to documents, according to Microsoft.

Tablet PCs also will play a role in Microsoft's new "Live software" effort to develop applications that users can access from multiple PCs and devices over the Net, chairman Bill Gates said in an interview this month. "Eventually, Live will use vision, and speech, and ink," he said. "It's about neat new ways of communicating."

Hospitals Test Tablets
Certain vertical markets continue to drive up sales of tablet PCs. Baylor Healthcare Systems, a nonprofit network of hospitals around Dallas, is testing tablet PCs from Motion Computing Inc., having five doctors in its hospitals take notes on patients' charts. The PCs could let doctors cover more ground and reduce the risk of mistakes by making notes on patients' charts available to colleagues immediately through a wireless network, instead of waiting for a transcriptionist to type up and distribute handwritten notes. "The desktop scenario for doctors isn't working anymore," says Michael Byrd, Baylor's corporate director of technology integration. The company also plans to port software on slate computers, which run an embedded version of Windows and are used to let patients fill out forms, to Microsoft's Windows XP Tablet PC Edition 2005.

Baylor is budgeting $1.5 million to $3 million for tablet PC hardware and software development during the fiscal year that ends next June, Byrd says. But some hospitals may continue to avoid tablet PCs unless their weight drops to less than a pound and their price to less than $1,000. If they do, "that's when adoption will explode, especially in health care," Byrd predicts. Bundled with accessories and preloaded software, tablets from Motion Computing can run $2,500 to $3,000, Byrd says.

Pharmaceutical company GlaxoSmithKline is arming sales reps in Canada with tablets that let them show on-screen information to doctors by tipping the keyboard-free machines forward, instead of whirling around an open notebook. And new apps, such as software from Proscape Technologies for drug-company salespeople, a Siemens program for home health-care providers, and new tablet functions from Siebel Systems, have propelled the popularity of tablet PCs at some companies.