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Commentary: Handheld heaven

Microsoft's release of the second beta version of its "Talisker" Windows CE operating system sets the stage for the next generation of Pocket PC-type devices and other Internet appliances.

    By Ken Dulaney, Gartner Analyst

    Microsoft's release of the second beta version of its "Talisker" Windows CE operating system is setting the stage for the next generation of Pocket PC-type devices and other Internet appliances.

    Talisker will be the underlying Windows CE operating system kernel supporting a range of Internet appliances, the most familiar of which is the Pocket PC.

    See news story:
    Microsoft pours second round of Talisker
    This beta version of Talisker will be the last before the final code is released later this year, and it is available free, except for shipping and handling costs.

    The large number of vendors considering the manufacture of a variety of products--from cameras to cell phones to set-top boxes--has made Talisker a highly strategic move for Microsoft. The software giant is fighting hard to have Talisker used by each and every one. It's Microsoft at its best: Define the market and then move to dominate it.

    Talisker will have a market among factory automation equipment, but that's not where its soul is. With much better real-time communications and underlying facilities, Talisker offers capabilities essential for manufacturers that wish to build mobile devices for customers from business professionals to young, mobile teenagers. Their support or rejection will make or break Microsoft in these varied markets. Talisker's added language support for Chinese and Korean and added support for Internet Explorer 5.5, MS XML 3.0 and DirectX8 play right into the hopes of manufacturers interested in Windows CE.

    Through a multilevel strategy, Microsoft is also trying to expand Talisker's user base by taking part in development programs with several companies. Siemens, for example, is working on a Web-browsing tablet based on the Talisker operating system. Wyse Technology is using it to build a desktop machine that runs Windows-based programs from a network rather than from a local hard drive.

    But it's unlikely Talisker will automatically permit Microsoft to dominate the handheld PC or other appliance markets in the same way the Windows operating systems dominate corporate and home PCs. For example, Microsoft's handheld PC market share by 2002 in the Pocket PC category will likely be only 30 percent, compared with 18 percent to 20 percent today. Handheld PCs are only part of the total market for an operating system such as Talisker, and it will have to compete with many new devices (consumer and other) coming to the market custom-built--that is, running their own operating systems.

    This is not a make-or-break move for Microsoft, but the company is obviously not underestimating Talisker's importance, either. The market for handheld PCs, as well as a whole host of other Internet-connected devices, is only beginning to be recognized, and it's not just the West that has exciting prospects--Asia's potential is enormous.

    (For a related commentary on what Microsoft is up to in mobile computing systems, see Gartner.com.)

    Entire contents, Copyright ? 2001 Gartner, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.