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Microsoft has high hopes for pocket PC

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Microsoft is confident that the soon-to-be-released Pocket PC software package will allow the software giant to gain on its competitors in the handheld device market.

The first Pocket PC devices, which will be launched through several hardware vendors in the first half of this year, will be competitive with similar products running Palm Computing's Palm OS and applications, says Brian Shafer, marketing manager for Microsoft's mobile device division.

"It's no secret we're looking to increase market share," Shafer says. "Pricing for the Pocket PC will be in line with what's currently available today on our side of the fence."

And when it comes to pricing, Shafer believes the Pocket PC-based devices will have an edge over the competition.

"If you buy a Palm device when it's brand new, you're paying a high price for something that will be less expensive later on," he says. "Our prices have always tended to stay at the launch prices."

Shafer says that Microsoft wants to make clear that if the Pocket PC does fail, it will not translate into a failure for the Windows CE operating system as a whole.

"In the Palm form factor, it's very important for Rapier to be a success," Shafer says, referring to the codename for the Pocket PC software package.

Pocket PC builds on the current generation of Windows CE-based Palm-size PC devices, which at large have failed to steal market share from Palm OS-based competitors. Shafer confirmed that this could be Microsoft's last stand in the palm-sized device market.

"If we're right, we'll be successful, if we're wrong, we'll either leave the field or come back with something else," Shafer adds.

Palm Computing also has the disadvantage of competing against itself for market share, as its own devices compete directly with other vendors' Palm OS-based devices, Shafer says. "You can't have your cake and eat it to."

Pocket PC device vendors, however, also will often be competing with each other rather than with Palm OS-based devices, which will be a challenge for Microsoft in its quest to gain market share, noted Diana Hwang, program manager, mobile research, at market researcher International Data Corp.

To be sure, Pocket PC will be playing catch-up with the Palm OS-based devices, which in the U.S. according to estimates have as much as 80% market share in the palm-sized device segment.

Microsoft has kept pricing and exact shipping details under wraps since the Pocket PC concept was announced in January by Chairman and then CEO Bill Gates.

Though the first Pocket PC devices are planned to be available in the first half of this year, Shafer says the company is being conservative with the release date. "Let's just say we won't be shipping on June 30."

Furthermore, Microsoft is planning on realistic launch announcements for Pocket PC devices. "We won't be doing a launch and saying 'you can buy this in two months,'" Shafer says.

A prototype Pocket PC device shown here at CeBIT, however, will not be among the first devices to reach the market.

Co-designed by Casio and Siemens AG, the device is not scheduled to ship until the first quarter of 2001. "They haven't even done the engineering diagrams yet," Shafer says.

Microsoft, in Redmond, Wash., can be reached at +1-425-882-8080, or at www.microsoft.com/.

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