Microsoft launches tablet PC drive

Hoping to write a new chapter in the saga of pen-based computing, the company unveils Windows XP Tablet PC Edition. PC makers including HP and Toshiba join in the festivities.

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NEW YORK--Hoping to write a new chapter in the saga of pen-based computing, Microsoft on Thursday officially unveiled Windows XP Tablet PC Edition.

Executives representing more than 20 companies manufacturing devices using the software joined

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Microsoft Chairman Bill Gates here for the launch. Acer, Fujitsu, Hewlett-Packard and Toshiba are among the companies making the new tablet PCs, which are similar to notebook PCs. Most of the devices allow the input of data with a stylus in addition to or instead of a keyboard.

Microsoft and other software developers, including Autodesk, Corel and Groove, have either updated existing programs or released new applications to support the Tablet PC operating system. Microsoft, for example, released an update to Office XP that supports the Tablet PC software's handwriting and "inking" technologies. More sophisticated enhancements will come with Office 11 sometime next year.

"The shipment of the next release of Office 11 will go even further in support for ink. There's lots of work being done to support that," Gates said.

Manufacturers appear to have taken a conservative approach with this generation of tablets. The products are geared more for vertical markets, such as insurance or health care, and niche uses, such as workers collaborating on projects.

Designs vary from Fujitsu's slate to Toshiba's convertible, which looks more like a typical notebook but "converts" into a tablet. The majority of designs are clearly focused on businesses not on consumers.

Gates kicked off the event by demonstrating a computer converting from a horizontal format to a vertical one. "There's a whole new way of personal computing" that's being ushered in by the Microsoft-backed vision of tablet PCs, he said. "The idea of a tablet is a natural idea."

Gates predicted that, by the end of the decade, "digital ink" would be as common as the graphical user interface is today.

But for now, analysts have offered dim projections on early sales. Gartner says that portables running the Tablet PC operating system would account for a mere 1 percent--or about 425,000 units--of worldwide notebook shipments next year. IDC predicted U.S. shipments of 575,000 tablets out of an estimated 13 million notebooks.

A number of corporations attended the New York festivities to show their support as early adopters of the technology, including 7-Eleven, Merck, British Petroleum, Wachovia and Best Buy.

IDC analyst Alan Promisel predicted that upper-management types or those who frequently go to meetings would likely be the early business adopters. But for manufacturers, middle management is the more important long-term market. "That's where the (sales) volume is," he said.

Still, he added, "the usage model for that market is unclear." One reason: Early tablet PC models, which typically use a 12.1-inch or smaller display, simply are not adequate replacements for a full-size notebook or desktop.

Promises and compromises
Some manufacturers, such as HP, hope to ease this problem with docking stations to which users can add an external monitor, keyboard and mouse. Promisel wasn't convinced that that would suffice. "It's all debatable what you consider good-enough computing," he said.

ARS analyst Matt Sargent faulted tablet PCs for similar reasons. "They're just too expensive," he said. "The way they're priced now people would only want them for their only PC--and that's not going to happen. There's not enough there to replace your main computer."

Sargent added: "I don't think these things are going to be all that successful as they're designed now, until they get down to around $500." In that case, a tablet PC would be an affordable adjunct to an existing computer.

Prices of the tablet PCs range from about $1,700 for HP's Compaq Tablet PC TC1000 to $2,500 for Toshiba's Portege 3505 Tablet PC. Fujitsu's Stylistic ST4100 Tablet PC sells for around $2,200.

Designs vary widely. The base unit of the Stylistic ST4100 slate has no keyboard, although one is available with a docking station; the Fujitsu device features a 10.4-inch display, 800MHz Pentium III-M processor, 256MB of RAM and 20GB hard drive.

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HP's TC1000 is more of a hybrid device designed for work with a stylus, foldout keyboard or docking station; it comes with a 10.4-inch display, 1GHz Transmeta TM5800 processor, 256MB of RAM and 20GB hard drive.

Toshiba's Portege 3505 is larger and heavier than the other new tablet PCs and looks more like a traditional notebook; it packs a 12.1-inch display, 1.33GHz Pentium III-M processor, 512MB of RAM and a 40GB hard drive.

Most models also feature 802.11b, or Wi-Fi, wireless networking. The Portege 3505 also packs Bluetooth, another technology for connecting peripherals to a computer without wires or cables.

Dreams of the mainstream
Toshiba's tablet PC--which, aside from the small display, is nearly powerful enough to replace a regular notebook--converts into either a tablet or an ultraportable.

"People don't want the tablet to be an extra device," said Oscar Koenders, vice president of product marketing and worldwide product planning for Toshiba's Computer Systems Group. "They told us, 'If I buy a tablet PC, it must replace my notebook.' If you're going to use this as your main notebook, you're going to want a larger screen."

Currently, though, the largest notebook screen available with the digitizer required for handwriting recognition is 12.1 inches, he said.

Toshiba expects that to boost sales it will have to create even larger tablet PCs or, looking at it another way, full-size notebooks that include tablet PC features. Making an ultraportable replacement was merely a starting point.

IDC's Promisel said that this approach is one way for the category to succeed. "As long as the price delta between the standard notebook and the convertible notebook isn't that great, that's where I think the real growth opportunity is."

To attract mainstream buyers, analysts said,

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manufacturers will have to focus on other areas. One idea would be to expand the tablet concept to include mainstream portables that people use everyday. In this scenario, a more standard 14-inch or 15-inch display notebook running the Tablet PC operating system could be used occasionally with a stylus.

HP sees the tablet PCs migrating from businesses to consumers via the education market, according to Ted Clark, manager of emerging technology markets for HP's notebook division. The company expects tablet PCs to be popular with students who would have the option of using keyboard or ink, and sees its hybrid approach as the right one for now.

Of pen and ink
Pen-based computers are certainly nothing new. Fujitsu and Sony, for example, produced earlier tablet PCs. IBM has failed twice in the market, with the original ThinkPad portable and with the TransNote.

Industrial designer Richard Sapper, who designed the original ThinkPad, said poor handwriting recognition is one of the major reasons pen-based computers have failed to find a place in the market.

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"This kind of thing has never been successful because it reads relatively few (letters)" that aren't written clearly, Sapper said. Short of 100 percent recognition, he said, the handwriting technology would not be good enough for most people.

Integration of the handwriting technology with the Windows operating system, and the backing of a wide range of big-name hardware manufacturers, could be what makes the difference this time around, some observers said.

"Before, there was no viable technology in terms of cost and efficiency," said Bill Buxton, chief scientist at Alias Wavefront, a Toronto-based developer of graphics drawing applications. "Now I believe this software and hardware platform does it."

Robert Walden, 7-Eleven's manager of emerging technologies, said that his company found success in its early use of tablets running the Microsoft software. Auditors who travel to the company's stores to track assets reduced data entry time from 16 hours to between four and six hours, he said.

"This is so simple--it's the next natural and logical step," Walden said.

But during the last six months or so, Microsoft backed away from touting handwriting recognition, instead extolling the benefits of inking capabilities that let users write on the screen as if it were a piece of paper.

"Microsoft originally was trumpeting the handwriting recognition, but has pulled away from that approach, realizing that user expectations are going to be too high for what the handwriting recognizer is going to be able to deliver," Promisel said.

But even flawless handwriting recognition might not be enough, ARS analyst Sargent said.

"Inputting data in a tablet format just doesn't make sense," he said. "It's not going to be intuitive. The keyboard is pretty natural, in terms of what you see in the workplace. It's a rare individual who looks at a keyboard and doesn't know what to do with it."

CNET News.com's John G. Spooner contributed to this report.