Will Pocket PC flourish or flounder?

Ruling doesn't address handheld OS specifically, and this uncertainty leaves it in limbo for both Microsoft and the hardware manufacturers supporting it
Written by Richard Shim, Contributor

The Microsoft case and judge Thomas Penfield Jackson's ruling centre on Windows, leaving the future of Pocket PC, the operating system for handhelds, up in the air.

There is the potential for Pocket PC, formerly Windows CE, to escape the Microsoft product hierarchy, develop more quickly and take a stronger position in the handheld market. It could also lose the confidence of the shrinking number of hardware manufacturers currently supporting it.

Analysts expect handhelds to pass PCs as the conduit to the Internet by 2003. And while Microsoft has spent a lot of resources in promoting the OS, it has not been able to put a dent in Palm's market share.

Joe Sims, an antitrust attorney at Jones Day Reavis~Pogue, believes that the Department of Justice was purposefully ambiguous because Pocket PC is not dominating its market segment. Sims said that the DoJ wants to put the onus on Microsoft to help work out the details.

"Pocket PC is sort of the orphan child of Microsoft's products right now. The details surrounding it and its future will have to be worked out after either the appeal or the breakup," said Rich Gray, an intellectual property attorney.

There are two possible scenarios for the OS, according to Mike McGuire, an analyst at Gartner Group. One is that Pocket PC will be freed up to be more competitive in a stand-alone OS company.

"The OS is viewed as a second-tier product for Microsoft because of offerings such as Windows and Office. But in a strictly OS company, more attention, from executives and developers, can be used to promote it," McGuire said.

And from the hardware manufacturer standpoint, there may be cause for concern in terms of product plans and development. McGuire said hardware developers don't like to see uncertainty of any kind, especially for OSes.

Spokespeople for the four hardware manufacturers currently supporting the OS -- Compaq, Casio, Hewlett Packard and Symbol Technologies -- said the companies are not balking from the lack of news surrounding the OS and are developing as scheduled for their devices.

Microsoft would not speculate on how the court's ruling would affect specific products, stating that the company does not believe the appellate court will sustain Jackson's decision.

Pocket PC has not increased its market share despite analysts' projections that it would dominate the handheld market. The number of hardware manufacturers supporting the OS has fallen from about eight, when the OS first came out, to four.

A new entrant to the handheld market, Sony, recently announced that its new devices will be based on the Palm OS. Sony is expected to preview the device at PC Expo 27 to 29 June.

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