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Commentary: Pocket PC 2002 is a winner

Microsoft's launch of its new Pocket PC 2002 for personal digital assistants puts its main competitor in this market in a difficult position.

By Ken Dulaney and Todd Kort, Gartner Analysts

Microsoft's launch of its new Pocket PC 2002 platform for personal digital assistants puts its main competitor in this market, Palm, in a difficult position.

Over the next year, Microsoft could win up

See news story:
Pocket PC 2002 debuts
to 30 percent of the market for PDA operating systems. In May, Palm's announcement of disappointing revenue results acknowledged that it was falling victim to a slowing economy and waning consumer confidence. Microsoft, with much deeper pockets, capitalized on Palm's struggle.

Pocket PC 2002--code-named Merlin--is armed with the sorts of features that will drive its adoption by companies, by far the most important customers for Palm and Microsoft. Better security, virtual private networking, Windows terminal server, instant messaging, back-office integration and better development tools are features that businesspeople want.

However, Pocket PC 2002 does not, for the minor increase in usability, reflect well on the year Microsoft spent on its release. Still, major device makers are falling over themselves to be in on device development with Microsoft. Already, Compaq Computer, Hewlett-Packard and Casio have devices ready with the new software. Other giants such as Toshiba, NEC and Mitsubishi Electric are also interested.

All of this can't be comforting for Palm. Pocket PC and Windows CE are fast becoming the standard for business, more by default than anything else as managers make the decision not to support two PDA systems. Because of Microsoft's ubiquity within most companies through operating systems and productivity software, it's not really surprising that many are opting for yet another Microsoft product.

Despite Palm still being a solid choice for business use, Gartner's recommendation to companies is to support Pocket PC 2002. Indeed, there's probably not much option as consumers continue to adopt the platform independently of any company policy.

Pocket PC has not made the sort of inroads into Palm's territory as Microsoft would have hoped, but its incursions are still impressive considering the slowing economy and the reduced spending by companies on products such as handhelds.

Pocket PC 2002 won't deal a death blow to Palm, and the overall battle is far from being won. But it will, for the moment, attract the attention of companies thinking of buying new equipment.

(For a related commentary on the Pocket PC 2002, see Gartner.com.)

Entire contents, Copyright © 2001 Gartner, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.