Microsoft lifts the lid on Pocket PC 2002

Microsoft Corp. plans to unveil its new Pocket PC operating system, which the company claims was designed around the requests of business customers, at the Demomobile 2001 conference on Thursday.

The Pocket PC 2002 operating system, which will begin to show up on PDAs (personal digital assistants) on Oct. 4, features improvements based on "the top 30 customer requests," said Ed Suwanjindar, product manager with Microsoft's Mobility Group. "Some of them are smaller, some of them are bigger and flashier," Suwanjindar said.

Among the flashier improvements are the inclusion of Microsoft's instant messaging software and the ability for users to customize the startup page, but Microsoft also made some improvements which might not seem so obvious, such as the ability to view contacts in an address book organized by company names, Suwanjindar said.

"This release definitely has an enterprise focus on it," he said. "Mobile professionals are the ones who will find the greatest value on these devices."

Other features of the new operating system include handwriting recognition built into the operating system, which users had to load separately in previous versions; an option allowing users to send a voice response to e-mails, in the form of a .wav file; spellchecking in both Word and Inbox; and the ability to "beam" information between devices running the Pocket PC operating system and Palm Inc.'s operating system, which runs on Palm's own devices, as well as those of Handspring Inc., Suwanjindar said.

Microsoft has also added features designed to make products using its operating system connect to a network, Suwanjindar said. "Users now have remote access to a Windows desktop or server from the device," he said. "But the heavy lifting is all done on the server." For example, a doctor on a wireless network can access patient files, but those patient files would be stored on a secure server, instead of the handheld. Pocket PC 2002 also supports VPNs (virtual private networks), which was not supported in past versions of the operating system, Suwanjindar said.

For security improvements, Microsoft has given access to some APIs (application program interfaces), so third-party software companies can now develop anti-virus software for the operating system, Suwanjindar said. The company has also improved the operating system's password interface, replacing a four-digit numeric PIN with alpha-numeric support, as well as adding a countdown clock on the password screen. With each incorrect entry, the amount of time before another attempt can be made increases, cutting down on the possibility of successful "brute force" attacks, Suwanjindar said.

Microsoft included some improvements that will satisfy consumers as well, including a new client reader for electronic books that allows for an e-book to be read using only a specific device, and Windows Media Player 8, which now supports both streaming and static video, as well as audio. Additionally, users can view video in full-screen format, so media such as theatrical trailers can be seen in widescreen format by turning the device on its side.

This time around, users can also download and install programs using Internet Explorer. "You can now download e-books directly to your device," Suwanjindar said. "You don't have to go through your PC anymore."

However, the price of devices running Pocket PC 2002 may catch some off guard. The first devices announced for the product, Hewlett-Packard Co.'s Jornada 560 family, are priced at US$599 for the 32M-byte model, and $649 for the 64M-byte model. Handheld market leader Palm Inc., sees this as a sign of Microsoft moving away from the consumer market. "They are really backing away from the mass market for handhelds in both their price points and their positioning," said Michael Mace, Palm's chief competitive officer. "They're not trying for mass-market customers."

Some of the new features in the Pocket PC 2002 operating system, such as VPN support, have already been available for Palm devices, Mace said. "The difference is that we do not shove every feature on the device by default," Mace said. "That helps us keep prices reasonable."

One analyst disagrees that the high price is an issue for businesses. "For enterprises, that's not a big issue," said Ken Dulaney, vice president of mobile computing for analyst group Gartner Inc. "But there's probably some confusion in the market as to whether people should buy devices now or wait until wireless is more mainstream." Wireless accessories for handhelds will likely become widely available between late this year and early next year, Dulaney said.

"But I think price is certainly an obstacle for consumers," he added. "They'll probably stick with Palm."

Microsoft also centralized the operating system around ARM Ltd.'s processor core, leaving previous devices using other processors in the lurch. By extension, this left a large number of users in the lurch, with software they had purchased for their old handhelds unable to run on the Pocket PC 2002 operating system, according to Palm's Mace. Palm recently announced that it will also standardize on the ARM processor core.

"Microsoft didn't tell anybody in advance that they were going to drop two processors," he said.

However, regardless of price, handheld devices are only expected to have a life span of 12 to 18 months, Gartner's Dulaney said. "They would have gotten their year of work out of those devices," he said.

Because the underlying technology behind these devices is improving so fast, companies are under tremendous pressures to increase features, Dulaney said.

"In this area, backward compatibility is a dirty word," he said.

Demomobile continues through Friday in La Jolla, California. The conference is produced by IDG Executive Forums, a subsidiary of International Data Group Inc., which is also the parent company of IDG News Service. More information is available at

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