Acer to use Palm's software in its new electronic organizer

Acer Inc (宏電), a Taiwanese personal computer maker that began making electronic organizers in 1998, said it'll use Palm Inc's software in its branded and made-to-order hand-held devices to build market share in Asia.

Acer, whose organizers currently run on Microsoft Corp's Windows CE operating system, will sign a licensing agreement with Palm on June 1, David Tsai, an Acer spokesman said. The license should also help Acer win production contracts, analysts said.

``Acer hopes to do contract manufacturing for Palm,'' said Andrew Lin, an analyst with JP Morgan Securities in Taiwan. ``They are expected to receive two orders, which people say are with NEC Corp and Casio Computer Co.''

While NEC and Casio account for little of the 30 million to 40 million units-a-year market for hand-held devices globally, contracts from those Japanese companies would help Acer demonstrate its ability to mass produce the organizers, Lin said.

By adding Chinese-language capabilities to Palm's operating system, Acer will help Palm enter new markets in Asia and shore up its falling market share at home.

Until now, regional manufacturers such as Group Sense International Ltd of Hong Kong have dominated the market for electronic organizers in China.

Acer should be able to secure as much as 5 percent of the 1.5 million unit market in China and Taiwan this year, Lin said.

Wang Cheng-tang (王振堂), the chief executive of Acer's branded-products unit, and a ``high-level Palm official'' will attend the licensing event, Tsai said.

Microsoft, the largest software company, said in March that Compaq Computer Corp, Sony Corp, Toshiba Corp, Acer and Fujitsu Ltd are developing so-called Tablet PCs, which will use the next version of its Windows operating system. Microsoft and Palm are rivals in the hand-held software market.