HP handheld sales look promising

Has Hewlett-Packard (HWP) moved closer to finding the right formula for slow-selling handheld PCs? Maybe so.

Handhelds based on Microsoft'sWindows CE operating system have never set the computer world

HP620LX

on fire because they have typically been too slow, the keyboard too cramped, and the screens too basic. But HP may have struck the right balance between form and function with its 620LX Windows CE handheld. Its formula for success: a wide, color screen, a slightly larger design to accommodate a larger keyboard, and better Windows software.

The initial response from retailers has been encouraging. Already, Computer Discount Warehouse (CDWC), a large catalog and online reseller, has almost sold out its initial order of the HP 620LX handhelds at $825 a piece. According to CDW, the shipment is not expected to arrive until February.

At CompUSA (CPU) in Santa Clara, California, sales of the 620LX are ahead of the pace of earlier Windows CE devices. CompUSA is selling the 620LX for $899.

Like a number of other new Windows CE devices, HP's new handheld is inching toward the notebook PC segment in terms of size. At just over 20 ounces, the 620LX is slightly larger and four ounces heavier than its 300-series predecessors and approaches the size of mini-notebooks, which are the smallest of notebook PCs. The newest HP handheld also offers a color display with 256-color 640-by-240-pixel resolution, a feature that seems to be driving the newfound popularity of the Windows CE-based device.

In terms of processor power, HP has also been creeping toward the Pentium processor-based mini-notebook segment. HP, which officially introduced the 620LX in November of 1997, upgraded the device with an Hitachi 75-MHz RISC processor, improving on the original 44-MHz chip. Also, HP has increased memory from 8MB to 16MB and added a slot for a VGA-out card that allows users to display items such as PowerPoint slides on an 800-by-600-pixel monitor. The card must be purchased separately.

"I think color displays are a great advantage," said Dr. Gerry Purdy, president of Mobile Insights, a consulting firm based in Cupertino, California. Color displays are easier to read, and perhaps more importantly, they are "an emotional communicator. It's a more enjoyable experience," he said.

A systems integrator with MobileScape, which sells only mobile computer products through retail and online channels, says the new devices are selling better because customers are more confident Microsoft is committed to developing the CE operating system.

"Windows CE 2.0 is much more scalable and robust when compared with Windows CE 1.0. The added support for color as well as promised support for ActiveX and Java and added stability make CE 2.0 a viable solution," said Harald P. Nagel, Internet systems integrator for MobileScape.

HP isn't the only vendor enjoying some early success with the color CE 2.0 handhelds. Sharp Electronics' Mobilon HC-4500, which sells for $999 at CompUSA, is selling fast enough in the Santa Clara store that a demonstration model isn't yet available because the devices are on backorder.

HP and Sharp were not available for comment.

Microsoft says that 500,000 Windows CE devices have been manufactured based on numbers from its licensing program. Analysts have previously estimated that 200,000 to 300,000 units have been sold to date.