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Gateway takes to tablets

The company is about to enter the market for tablet PCs by joining forces with start-up Motion Computing, another step forward for Microsoft's latest operating system.

LAS VEGAS--Gateway will jump into the market for tablet PCs by teaming up with Motion Computing, another step forward for Microsoft's latest operating system.

Gateway confirmed Monday that the two companies will co-brand a tablet running Windows XP Tablet PC Edition, a version of the Microsoft operating system that features handwriting recognition. Motion, an Austin, Texas-based start-up formed by onetime Dell Computer executives, earlier this month released its first tablet, which weighs three pounds and contains a 12-inch screen.

The Gateway-Motion tablet is based on Motion's design, but will carry the logo of both companies. Gateway plans to market the tablet primarily to its government and small-business customers.

"There's a lot of interest" in the vertical markets, said Mike Stinson, vice president of mobile technology platforms at Poway, Calif.-based Gateway. "We've got some government customers who've expressed some interest."

The companies will show off the devices in a few weeks.

A new crop of tablets are the latest attempt by PC and software makers to take handwriting recognition mainstream. Proponents claim that handwriting-recognition software has vastly improved over the years and that the public has been acclimated to the concept through handhelds running the Palm and Pocket PC operating systems, both of which allow people to input characters through a stylus.

The cost of adding the extra chips and other electronics to capture written characters is also dropping rapidly, according to Microsoft CEO Steve Ballmer, among others. Microsoft expects that tablets, or at least notebooks containing the Tablet PC software, will eventually supplant regular notebooks.

Voice recognition, Ballmer added, will be a standard feature in another three to four years.

Analysts, though, believe that the acceptance rate will be slow and that the software still contains many kinks. Market researcher IDC expects 575,000 to 775,000 tablets to ship next year. Hewlett-Packard, Toshiba and Acer also have released computers containing the Tablet PC operating system.

"There are some brave souls out here breaking ground, but the real products have yet to be developed," said IDC analyst Roger Kay.

Tablets come in two basic forms: a convertible, which contains a keyboard so that the computer can be used as a notebook; and a slate, which looks like an Etch A Sketch toy. Motion makes a slate-type device, but sells an attachable keyboard and docking station so that the unit can be used as a desktop.

Gateway, which will buy the devices from Motion and its contract manufacturers, may speak to other tablet makers and is also looking at convertible models, Stinson said.

"There area a lot of different form factors, and we are looking at all of them," he said.

Prices for these new tablets range from around $1,700 to well over $2,000.

NEC, meanwhile, showed off its version of a tablet at Mobile Focus, a product demo showcase taking place at the same time as Comdex in Las Vegas. The company's Versa Pro weighs only 2.1 pounds and measures 0.6 inch thick, said Joe Harris, an NEC spokesman. NEC will release it in the first quarter, he said.'s Stephen Shankland and Ian Fried contributed to this report.