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Microsoft targets devices boom with new unit

The software giant may be trying to convince hardware makers that the PC is still king, but it's hedging its bets with a new unit created to develop operating systems for appliances such as handheld devices.

NEW ORLEANS--Microsoft has erased any doubt that non-PC hardware will be an important part of its future business.

Even though chairman Bill Gates attempted to convince hardware makers here that the PC is still king, the company is hedging its bets. Microsoft has created a division focused specifically on developing embedded operating systems for so-called appliance hardware, such as handheld and retail devices, and other equipment, the company announced yesterday at the Windows Hardware Engineering Conference.

The new unit is dedicated to providing software, applications and services to software developers and manufacturers of appliances, the company said.

Microsoft's Windows CE 3.0 operating system, along with embedded Windows NT, which will be released in June, will fall under the new division's purview.

The WinHec show is typically devoted to educating hardware and software manufacturers about Microsoft's plans for future versions of its operating systems. By announcing the new division at this venue, Microsoft is clearly attempting to convince developers that the company has finally found a cohesive vision for its embedded and appliance division.

Embedded operating systems are generally invisible to the end user, running the basic functions of a device in the background. Such devices run the gamut, from Internet-enabled gas pumps to medical equipment to handheld devices and point-of-sale retail equipment.

Microsoft has conceded that the embedded versions of its Windows operating systems are not suitable for all embedded applications. The company says it will only market its software to manufacturers of 32-bit connected appliances with some type of Internet service.

The software maker is also leaving behind certain markets, such as some types of industrial automation technology, according to Kim Akers, product manager in the newly created appliance group.

"We didn't have a clear-cut strategy," Akers said. "This is more about the device than it is about the OS."

Windows CE 3.0, which will be released in June, is more versatile than its predecessors, includes better support for development tools, and gives application developers an easier way to hone in on the exact portion of the OS they want to use, according to Deanne Hoppe, another appliance group product manager.

The appliance group will market Windows CE 3.0 as the underlying operating system to third-party manufacturers and internal Microsoft divisions responsible for the Pocket PC handheld device and the WebTV television service, Hoppe said.

The latest version of Windows CE 3.0 will not immediately include support for Universal Plug and Play, Microsoft's home networking communication technology, or USB 2.0--two areas Microsoft has asked outside developers to implement.

"We will be putting it in," Akers said, explaining that the timing of the reorganization and product cycles had made the new technologies impossible to support in version 3.0 of Windows CE.

An embedded version of Whistler, the next version of Windows 2000, will be released in 2001, about 90 days after the release of the general version of the OS, Microsoft announced. The company will not develop an embedded version of Windows 2000.