marketplace CE

Philips and LG Electronics have stopped producing PC Companions and we've heard little from Sharp and Everex recently. At the same time, Palm Computing's Palm III and V still dominate the handheld market. Their Palm VII is turning heads and Handspring's Visor and Symbian's (Psion's) new handhelds are ready to join the competition. What does that all this mean for Windows CE and its users?

The current shakeout in PC Companion manufacturers isn't that surprising. When Microsoft entered the handheld arena in 1997, it did a great job finding partners to manufacture new devices using the new Windows CE operating system. It convinced these partners that the handheld market would be huge and that supporting a standard operating system (Windows CE) would help jumpstart things. The logic was good, but the product needed to be better.

Microsoft followed its usually effective product development strategy with the introduction of Windows CE. It gave its best shot, but got it out quickly. Then it waited for user feedback to fine tune and fix things in the next release. Unfortunately, many users (and reviewers) were unsatisfied with Windows CE 1.0 and its built-in applications. In the meantime, Palm Computing continued its surprising success by developing a simpler operating system and platform that did fewer things, but did them very well.

Three years have past. The Windows CE operating system and built-in applications are much improved. And with the release of ActiveSync 3.0, Microsoft has finally gotten desktop connectivity right. Unfortunately it took a long time, and that was hard on many of the pioneering manufacturers of PC Companions. Also, lower than expected sales of Windows CE devices meant lower sales of third-party hardware and software accessories.

The good news is...

Fortunately, not all the news is bad. The core operating system is now strong, the built-in applications are powerful, and Microsoft is ramping up for the release of the next, new and improved version of Windows CE (code named "Rapier") sometime next year. Now is an excellent time to be aboard the Windows CE bandwagon. Hewlett-Packard and Compaq have shown the most commitment to Windows CE by introducing Palm-size, pocket sized, and mini-notebook sized units. Casio is focussed on its strength, producing exciting consumer palm-size product. Users seem quite satisfied with NEC's small, compact, touch-typeable offerings. Vadem's dual-purpose key and tablet machine wins the prize for most innovative design. We believe that the manufacturers and software/accessory developers willing to assume a Windows CE leadership position NOW, will be in good shape as the market takes off.

And, yes! The pundits predict that the handheld market will be huge and Microsoft's share will continue to grow. IDC, an independent market research company, has predicted total sales for all types of handhelds: 1998 -- 4.3 million (27% Windows CE); 2000 -- 8.1 million (44% Windows CE); 2003 -- 18.9 million (70% Windows CE). Microsoft has demonstrated its commitment to Windows CE by investing five billion dollars with AT&T to insure Windows CE is the operating system for AT&T's TV set-top boxes.

We're already seeing many sizes, shapes and capabilities in Windows CE devices. The release of the next version of the operating system will bring even more diversity to the Windows CE offerings. Again, the companies that can stick it out will be in the best position to take advantage of the rising Windows CE wave.