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Microsoft, Casio forge new alliance

Microsoft and Casio today formed a partnership that will result in a new breed of "interactive" handheld computers.

Microsoft and Casio Computer today formed a partnership that will result in a new breed of "interactive" handheld computers, the first such collaboration between the software giant and the market leader in handheld devices.

The companies will create a new architecture for a "category of computer-based consumer devices designed to connect to, and share data with, personal computers running the Windows operating systems," Microsoft said.

Microsoft will develop not only system software but also applications and development tools for these products, while Casio will manufacture the devices themselves.

Although the companies haven't provided any specifics about products, Microsoft may apply work it is doing on Pegasus, a small footprint OS for handheld devices, to the new architecture said Diana Hwang, an analyst at research firm International Data Corporation.

Other companies including Compaq Computer and Toshiba are rumored to be working on Pegasus-based handheld or PDA (personal digital assistant) devices that may appear as soon as this summer.

Although these computers will take on various forms, some will readily exchange data with desktop PCs, while others are expected to emphasize advanced wireless connectivity. One software technology expected to materialize as part of the release of this wave of new devices is "intelligent agents," small networking applications that assist users in searching for information on the Internet.

With these agents, the new handhelds and PDAs may end up competing with the other new breed of computers, the much-ballyhooed Internet PCs like Oracle's Network Computer. The new handhelds are expected to be priced in the same range, between $500 and $1,000.

They will also run up against mobile Internet devices shipping from IBM Japan that have already, in some respects, taken the lead in this area. IBM Japan has been shipping for some time in that country an inexpensive mini-notebook PC that has a keyboard and a 6.5-inch color LCD screen PC. It is used widely in Japan as a mobile device for connecting to the Internet.

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