Why Windows is still the big OS wheel

Legal wranglings aside, Microsoft is still powering PCs. Its prospects in the handheld and gadget space might be looking up, too
Written by Mary Jo Foley, Senior Contributing Editor

With the PC Expo trade show just around the corner, thoughts turn to hardware -- PCs, NetPCs, legacy-free systems, handhelds, cell phones, smart phones. But what's powering all the latest and greatest devices?

For the moment, it's the same old operating systems and browsers.

There was good reason judge Thomas Penfield Jackson ruled that Microsoft was a monopoly in the Intel X86-based desktop space: Windows 95/98/98 SE is preloaded on more than 90 percent of these systems. On the device side, meanwhile, the market is more fragmented, but Palm OS is king, at least for the moment.

In the not-too-distant future, expect some movement within both the Intel PC OS and device OS fronts.

While there will likely be some increased acceptance of Windows alternatives, such as BeOS and Linux, driven primarily by the ABM (anyone but Microsoft) groupies, Windows will continue to dominate the Intel PC OS news and the market. The next two Windows releases on tap, Windows Millennium Edition and Whistler Consumer, are expected to be fairly minor, in terms of changes made to the feature set and user interface.

Microsoft is putting the finishing touches on Windows ME, aka, Windows Millennium Edition. Windows ME will provide a good indicator of what the increasingly integrated Windows for home/consumer users will look like -- unless the US Department of Justice has its way and Microsoft is ordered to halt its integration binge.

Windows ME is expected to go gold in the next month or so, possibly in time to make it onto back-to-school systems and definitely in time to show up on Christmas-season PC models.

Windows ME is Microsoft's first purely consumer-focused version of Windows. It is slated to be the final Windows 9X-kernel-based release, according to Microsoft. The release is slated to provide enhancements in the areas of Internet connectivity, home networking, PC health and digital media management, Microsoft officials have said.

Release Candidate 2 -- a beta release that Microsoft told testers might be the final beta of Windows Me -- shipped to testers earlier this month. One of the primary components of Windows Me, Internet Explorer 5.5, went gold around 10 June.

Sources said the major impediment to finalizing the Windows Me code is the still-not-completed Windows Media Player 7, an element Microsoft decided to integrate into Windows Me fairly late in the development process.

Meanwhile, Microsoft developers also are laboring on Whistler, the next upgrade to Windows across the board. Microsoft is planning on consumer and business versions of Whistler, as well as 32-bit and 64-bit flavors of the forthcoming NT-kernel-based operating system.

Earlier this year, Microsoft scrapped plans to develop 'Neptune', a consumer-oriented version of Windows based on the NT kernel, instead focusing on Whistler. (Whistler also supplants Odyssey, referred to by some sources as NT 5.5, which had been slated as the first full-fledged upgrade to Windows 2000.)

Whistler progress is slow, but steady. According to Microsoft internal documents examined by ZDNet News, the software developer is endeavoring to release a 'preview', or alpha, version of the 32-bit Whistler to selected PC maker and software vendor partners by 28 June.

Microsoft is shooting to deliver a wider-scale (but closed) first beta of Whistler seven weeks later, some time around late August.

Microsoft's stated goal is to ship Whistler in the first half of next year. Internally, the company's developers are still hopeful they might go gold with Whistler by August, which would allow them to hit the back-to-school market. The worst-case projection, according to sources: Whistler will come preloaded on Christmas 2001 PCs.

While Microsoft's got the PC OS market all but sewn up, the company is facing an uphill struggle on other devices, such as PDAs, cell phones and interactive TV systems.

In the device space, it's Palm OS, not Windows CE, that rules the roost. Microsoft officially rolled out its embedded Windows CE 3.0 product and related development tools Thursday.

It could be these very tools that end up giving CE a fighting chance at this end of the market, said Mike McGuire, principal analyst for mobile computing with Gartner Group.

"At the operating system level, at least in the existing market for tablets and PDAs, there are new questions brewing," said McGuire. "How do you get these devices into the corporate market? Will handheld growth be attributable to more media-rich, all-purpose platforms, like PocketPCs, or those with more targeted functionality, like Palms?"

McGuire said that Microsoft's wealth of development tool products and knowledge could give the company a push. "Microsoft has a good story here, but Palm, at least so far, doesn't really have much of a strategy here."

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