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Everex abandons palm-sized PC line

The company was never a heavy hitter in the handheld market, but the exit is another blow for Microsoft's Windows CE, which has struggled to make a dent in Palm Computing's market-share dominance.

LAS VEGAS--Manufacturer Everex became the latest defector from the Windows camp, as the company confirmed it has effectively discontinued its line of palm-sized PCs based on the Microsoft operating system.

Everex has abandoned plans for the Freestyle 540, a color-screen device announced last March but never brought to market. In addition, the company is discontinuing the monochrome palm-sized devices it introduced last year, a company representative confirmed.

Everex is showing no handheld devices at all in its booth here at the Comdex computer trade show, which is otherwise rife with new devices and appliances designed to organize information and access the Internet. The company had long been rumored to be shutting down its Windows CE-based product line operations.

Although Everex Comdex: Closing the millennium was never a heavy hitter in the handheld market in terms of sales volume or design innovation, the news is another blow for Windows CE, which has struggled to make a dent in Palm Computing's market-share dominance. Microsoft has lately been keeping a low profile as it prepares for Windows CE's next update, but Everex's exit--coming on the heels of Philips's recent discontinuation of its Nino device--brings unwanted attention to the company's operating system for scaled-down Internet appliances and handheld computers.

The reason for Everex's exit is twofold, the company said. One, customers showed no interest in monochrome devices based on Windows CE, and two, the color displays supported by the newest version of the operating system are exceedingly scarce.

Windows CE has the ability to run more powerful applications than the Palm operating system, but the more robust software also has the tendency to drain the battery. While a heavily-used Palm device can run for weeks on one battery, a Windows CE device must be continually recharged, an Everex representative explained.

"Battery life is the major drawback," the Everex spokesman said, adding that because of power limitations, palm-sized PCs can only be used as companions to a desktop computer, not as stand-alone devices.

In addition to the battery life and other software issues, Everex had trouble getting its hands on enough color displays to bring its product to market. Everex's parent company manufactures and distributes screens for Compaq's color palm-sized PC. But because of shortages of the color displays, Everex could not be spared any screens for its own device, the company said. In fact, the manufacturing side of the company has had trouble filling even Compaq's needs for color displays.

Everex is not the only manufacturer to struggle with color-display shortages. Casio, Hewlett-Packard, Compaq and Philips have all experienced delays. But Everex opted to discontinue the line rather than continue manufacturing its monochrome Freestyle because the black-and-white screen quality was too poor, it said. Philips made a similar move this summer.

Screen delays have led Microsoft to push back future releases of its operating system to give manufacturers enough time to sell the current generation of devices, sources say. For its part, Microsoft denied the assertion that Everex's bad fortune in the market was due to any problems with the company's software. In any type of market with multiple manufacturers, some will eventually drop out, said Brian Shafer, product manager for Windows CE.

"If you talked to Packard Bell, they'd say the PC is a failure," Shafer said, referring to the company's recent announcement that it is exiting the PC market because of poor sales.

Shafer further noted that Philips may have dropped the Nino, but it will be one of the manufacturers of the newly announced MSN Companion, which will run Windows CE. "You have to take it in context," he said. "More manufacturers bring more innovation to the market faster--people will come and go."