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Tablet PC rivalry sets in

A start-up formed by a group of Dell Computer visionaries plans to release its device next month. Will it find the right formula for success?

A start-up formed by a group of Dell Computer visionaries has high-end aspirations for tablet PCs.

On Nov. 7, Austin, Texas-based Motion Computing plans to unveil its tablet-style computer that will offer more deluxe features than competing machines, according to CEO Scott Eckert.

The company's M1200 will contain an ultra-low voltage 866MHz Pentium III, with between 128MB and 1GB of memory, and a 20GB, 40GB or 60GB hard drive. The device's 12.1-inch screen is expected to be larger than many competing devices' displays; also, the weight of the three-pound machine will be evenly balanced, making it easier to use as a writing "tablet," Eckert said.

"You (will) use it more spontaneously than you do an ordinary computer," he said. "This feels like a new category...It is not just a notebook."

Tablet PCs are portable computers with a specialized version of Windows XP that offers handwriting recognition, among other features.

Hewlett-Packard, Toshiba, Fujitsu and Acer are scheduled to release their own versions of tablet PC devices, based on Microsoft's operating system, on Nov. 7.

Motion brings to the table a stable of hardware talent, as many of its top executives have spent time at Dell. CEO Eckert, for one, was instrumental in creating Dell Online. Other Dell alumni include Chief Designer Tom Bentley, Vice President of Software Charles Zeller, Vice President of Sales Ralph Spagnola and Chief Operating Officer David Alounian.

Despite its executive strength, Motion may still face an uphill battle because the hardware market is notoriously difficult on start-ups.

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Analysts said, however, that the company's marketing strategy could pay off. Motion plans to push its product at vertical markets such as hospitals and insurance companies. Professionals in these industries are often on the go; doctors could collect data on patients, for example, while making bedside visits.

"The vertical market (for tablet PCs) is already established," said Alan Promisel, an analyst at research company IDC. He added that tablets based on Microsoft's Tablet PC operating system could cost substantially less than existing tablet-type computers already used in certain industries.

"The industrial design (of Motion's product) is kind of unique," he added.

Eckert said the company does plan to eventually sell its product to consumers. The device will come with a keyboard and docking station so it can be used as a desktop computer, for example.

The size and shape of tablet-style PCs varies. Some models play off the concept of the writing "tablet," offering a flat slate for a person to write on, similar to the popular children's toy Etch-a-Sketch. Other models include a keyboard and a screen that pivots so that a device can be used as either a notebook computer or a tablet. Motion plans to make tablet PCs that follow the slate design.

Finding the tablet faithful
Fans of the computing format believe that over time, other keyboard-free methods of data input will become increasingly popular, especially for writing quick notes or in Asian countries where complex language characters make keyboard input challenging.

Between 570,000 to 770,000 machines based on Microsoft's Tablet PC software are expected to be available to the U.S. market in 2003, IDC's Promisel said. That's a small number when compared with the 13 million notebook computers expected ship in the United States next year.

It may still be too early to tell whether tablet-style PCs will find a suitable niche. The growing popularity of Wi-Fi networks, for example, is one thing that could help boost the popularity of mobile computing, Eckert said. Until recently, most people used notebooks as light desktops that could be moved from one Ethernet outlet to another. Wireless connectivity greatly enhances the appeal of such portable devices.

Critics point out that Fujitsu and other hardware companies already have tablet PC devices on the market--yet most run a standard version of the Windows operating system. Price may be a factor in keeping tablet PCs from catching on; current tablets cost from $4,000 to $5,000. Machines running the Tablet PC operating system are expected to cost around $2,000, Promisel said.

Additionally, energy-efficient processors and small hard drives have also steadily declined in price, which in turn, lowers the overall system cost.

Putting a shine on the inside
Microsoft has compiled a massive database of handwriting samples and a dictionary for the first release of its operating system for tablet PCs, said Jeff Raikes, Microsoft's group vice president, last month in an interview with CNET

English, French, German, Korean, Japanese and simplified and complex Chinese versions are promised to be supported at the system's launch. Support for Spanish and Italian will follow.

Finally, "you now have a full strength OS," Eckert said.'s Ian Fried contributed to this report.