Already gaining momentum over chief rival PalmSource, Microsoft Monday is set to announce a new version of its software for PDAs that is poised to make Pocket PCs more attractive to users.Called Windows Mobile 2003 Software for Pocket PCs, the software offers enhanced support for digital media and messaging as well as wireless connectivity using Bluetooth and wireless LAN (WLAN) technology. Also, developers can now use Visual Studio .Net to create applications for Pocket PC devices, Microsoft said in a statement."With this new release, the focus is not on delivering a bunch of new features but on refining the platform and some key technology areas," Ed Suwanjindar, lead product manager at Microsoft's Mobile Devices Division, said in an interview.Windows Mobile 2003 Software for Pocket PCs succeeds the Windows Powered Pocket PC 2002 software released in October 2001. The upgrade represents the move from Windows CE 3.0 to Windows CE .Net 4.2 as the underlying operating system, Microsoft said. Windows Mobile is a new brand Microsoft will use for its products for PDAs and mobile phones, the company said.The update will mostly benefit enterprise PDA users, said Gartner Principal Analyst Todd Kort. Consumers won't notice much difference, he said."This release is more important to the IT guys because now they have more confidence that wireless is getting more support. For the consumer there is not that much to sink their teeth into except for the new media player," he said. "Some of the things that users are requesting are not in this release, such as landscape mode and higher resolution displays."On the wireless front, a new Connection Manager allows devices with 802.11b WLAN hardware to detect WLANs that use the standard and makes connecting a snap. The same goes for linking to devices using Bluetooth. In addition, connections to mobile phone data networks are now also kept alive if the device is set to standby, allowing users to continue to receive e-mail and instant messages, Microsoft said.Enhanced messaging is further offered especially in combination with Microsoft's forthcoming Exchange Server 2003 e-mail platform. Users who are online can have mail automatically synchronize. Also, when a user forwards an e-mail message with an attachment, the attached file is forwarded from the server and does not have to be sent from the PDA, eliminating the need to send files over narrow connections.Improved entertainment features are provided in Windows Media 9, which is now part of the operating system. This offers improvements of audio and video quality. Also, with the Plus Digital Media Edition pack for Windows, users can create photo albums on the desktop for viewing on the PDA and synchronize audio and video content.Together with the refreshed Pocket PC software, Microsoft also announced Gateway and Victor Co. of Japan Ltd. (JVC) as new hardware partners. Each will be releasing devices with the new software by year-end, Microsoft said.Existing partners including Toshiba, Dell and HP will have devices running Windows Mobile 2003 software available on Monday, coinciding with Microsoft's announcement. These devices will be PDAs without phone features. Phone-PDAs will be out later this year, Microsoft said.Even though the worldwide PDA market has suffered six consecutive quarterly year-over-year declines, Microsoft is gaining market share over PalmSource, Gartner's Kort said.In 2000, the Palm operating system was installed on 65.5% of PDAs shipped, while Microsoft's Windows CE was only on 12% of units shipped. In 2002, Palm's share had dropped to 55.1%, while Microsoft's share jumped to 25.8%, according to Kort."What is happening is that the consumer side of the market, the Palm side, has been declining. The enterprise side of the market has been growing, and that side is split between Palm and Microsoft, but because vendors like HP, Dell and Toshiba are enterprise players, Microsoft is gaining ground there," Kort said.Business PDA buyers, although still a minority, prefer Microsoft over Palm because of the stability of the platform and the similarity of the devices sold using it, Kort said.