The Pocket PC, age 5

The Pocket PC turned five this week, and experts say the platform will be around for at least another five years, despite the increasing sophistication of rival form factor the cell phone.

In April 2000, Microsoft CEO Steve Ballmer introduced the world to the Pocket PC as a pocket-sized organizer

that could handle the chores of a PalmPilot – like calendaring applications and contact management – but also office productivity tools and Web surfing.

The Pocket PC, popularized by Compaq’s iPaq device, was the first successful marriage of a Windows CE-based operating system to a personal digital assistant (PDA), said Microsoft Canada’s mobility solutions manager Alex Nanos.

“We hadn’t had a great success or traction on those device platforms at that time,” he said. “Up until that point it had been Microsoft creating the operating system, hardware manufacturers creating the hardware form factor, but neither really fitting each others’ specifications.”

Elevated co-operation between Microsoft’s developers and product OEMs led to a device that people could actually use, said Nanos. The teams asked enterprise customers what sort of functionality they looked for in a handheld and crafted a device that was a balance of features, screen size and processing power.

“Out came the Pocket PC 2000 and the successful brand of Pocket PC was born,” said Nanos.

Until that point, Microsoft had experienced its share of misfires with devices running the Windows CE operating system, which has since been rechristened Windows Mobile. “It didn’t do so well at first,” said Ted Schadler, analyst with Forrester Research. “but they continued to invest in it because they believe in portable platforms. . . . The Windows Mobile group has understood better than other parts of Microsoft that they are a component supplier and they have to listen to their OEMs (and) customers.”

Microsoft was able to capitalize on the market that Palm had nurtured with its PalmPilot devices and provided an operating system that was attractive to developers since it was similar to the Windows desktop OS, according to one professional working in the industry.

“Almost everything’s the same, which is kind of a nice little ploy on Microsoft’s part. It just makes it so much easier for developers to start working on it,” said Alex McKelvey, a Toronto-based Pocket PC consultant and developer.

“To be honest, I think the Palm OS is pretty far behind,” he added. “The Palm OS started out limited more to being a little pocket organizer. Microsoft wanted (Pocket PC) to be used as an organizer, but they also had an eye to the future. They realized that people weren’t just wanting it to keep track of their contact lists. They put in a lot of advanced features.”

Eventually, those advances included network connectivity. Upgrades to the Pocket PC included Wi-Fi and Bluetooth, making it possible to synchronize the device with a desktop or server wirelessly.

Connectivity became central to the handheld market, especially when cell phones began to display PDA-like qualities. Dubbed smart phones, these devices handle voice but also e-mail, Web surfacing, calendaring and other applications, giving rise to a new debate: as cell phones start to look more like PDAs and PDAs like cell phones, is there really a need for both form factors?

Microsoft introduced a smart phone OS in 2002, initially in Europe, running a special edition of the Windows Mobile OS. Pocket PCs like the iPaq also added voice capability.

Two styles of device emerged, said Marwan Al-Najjar, Pocket PC product marketing manager for HP Canada.

“Is voice your No. 1 priority and then data? Then probably it’s the smart phone that you need,” he said. “If it’s the other way around, then the Pocket PC Phone Edition is what you need.”

The fact that there’s no single device that can do both things equally well means that smart phones and Pocket PCs will be able to co-exist for some time, said Al-Najjar. HP, which took over the iPaq brand when it bought Compaq in 2002, will continue in the Pocket PC market and is planning to develop its own Windows Mobile smart phone.

“There will always be two products: a smart phone and a Pocket PC. At least, that’s what our vision is,” said Al-Najjar.

That strategy is borne out by recent Forrester data. A research survey from December 2004 says that the most appealing element of PDAs is personal information management, which was the original selling point for both Palms and Pocket PCs. Also, few people are looking for sophistication in cell phones and don’t even use many of the applications that are standard with some phones. “Consumers like devices that do one thing really well,” said Schadler.

Microsoft’s Nanos admitted that there has been a “leveling off” in the market for Pocket PC devices with limited connectivity, but said that newer Pocket PCs are keeping pace with the sale of smart phones.

“If one took over dramatically, then I think you’d see the company shift its resources, but at this point they seem to be moving in parallel,” he said.

But in another five years, said Nanos, it could be a different story. If Microsoft, HP or any of the other companies vying for market space could develop a product with the ideal screen size, bandwidth and pricepoint, it could eliminate the distinction between PDAs and smart phones. Or at least blur the lines a little more.

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