Compaq Computer is developing a palm-size PC with a color
display for release later this spring, sources say, a move that lends
credibility to the struggling platform while raising questions about the PC
giant's handheld strategy.
Compaq will unveil a palm-size PC
based on the newest version of the Microsoft Windows CE operating system. Code-named Wyvern, the new devices are due this
quarter, sources close to the company confirmed.
Although not Compaq's first Windows CE product, observers say that the
company's support of the struggling palm-size PC is a vote of confidence
for the platform's long-term chances for survival. Compaq will become the
first major PC maker to release a palm-sized CE device.
"This is a boost to the palm-size PC," said Randy Giusto, an analyst at International Data Corporation.
vendors are expected to sign on in the next couple of months, sources say.
One possibility is Hewlett-Packard, which hosted a Wyvern preview at the Consumer Electronics Show in Las Vegas last
month, and has introduced a color palm-size PC in China. HP currently
markets a Jupiter-class device and an H/PC under the Journada brand name.
Compaq's palm-size PC is expected to use a stylus for inputting data and
support the general handheld applications. Like the popular Philips Nino, Compaq's device is
expected to feature four quick-start buttons for instantly launching
specific applications, sources say. No word yet on expected pricing, but
high-end palm-size PCs like the Nino currently go for $450.
The Compaq device will also offer a color display, unlike previous
palm-size PCs. Microsoft's rival in the handheld space,
Palm Computing, is also rumored to be hard
at work on a PalmPilot with color display for release later this year.
Color displays mightily impact the cost, weight, size and battery life of any
device, according to Giusto. "The color has to be very good for the big
performance hit you take," he said, projecting that it will take at least
two years before color devices appeal to the mass market.
Microsoft entered the space a little over a year ago, but has struggled to
make dents in PalmPilot's overwhelming popularity. Microsoft's palm
alternative garnered just 15 percent of the market last year, according to
IDC. But that balance is projected to shift dramatically over the next few
years, with Microsoft
taking 55 percent of the market by 2002.
The market for handhelds in general is also expected to grow, according to
a study released today from Cahners
In-Stat Group, a technology market research firm. Almost half of all
companies surveyed believe PalmPilot use will grow by 2000, and about
one-third of survey participants believe that Windows CE devices will grow
One key factor in Microsoft's favor is the sheer number of its
manufacturing partners, analysts say, which will increase with the addition of a
manufacturer like Compaq. Less clear, however, is Compaq's handheld
strategy, and why it is moving into the PDA
"Compaq has been playing in the H/PC, with an eye on Jupiter and palm-size
PC," Giusto said. "But there's only been pockets of opportunity. There
hasn't been a big volume play--big PC vendors are used to shipping
thousands of units a quarter, and that's not the case with handhelds."
Compaq, which offers a half-VGA handheld PC based on Windows CE, announced
support for Microsoft's Jupiter platform last October, but no product has
materialized. Jupiter, also known as the H/PC Pro, is a larger device more
closely resembling a mini-notebook in size and feel.
"A lot of vendors are waiting for revisions to the operating system, and to
the Jupiter shell," before continuing product development, said Giusto.
"There are some fundamental problems with performance and ease-of-use," he
said, such as problematic synchronization between the device and desktop
applications. "When you see some notable changes to Windows CE, expect to
see [Compaq] and other majors come out with products."
Once those glitches are addressed, Giusto believes that more major
manufacturers will begin supporting the platform, leading to increased
"When you have the interface improving, and developers
saying it's a viable platform, then you have a groundswell. And with 10
vendors in the space there will be sheer outnumbering," of the PalmPilot,