Microsoft Corp said its Windows CE software will run Toshiba Corp's first handheld organizers as the biggest software maker competes with Palm Inc to win over device makers.
Toshiba, Japan's biggest maker of computer chips, plans to release its first handheld device in Japan next month, said Ben Waldman, vice president of Microsoft's mobile-devices division.
The Genio organizer will be available in the US by year's end.
PHOTO: AFP
Microsoft is trying to unseat Palm as maker of the most popular software for running handheld devices. Organizers using Microsoft's program, known collectively as Pocket PCs, have taken sales from Palm, which has cut prices as inventories pile up.
Microsoft said sales aren't falling for its partners such as Compaq Computer Corp, maker of the iPaq.
"The whole Pocket PC industry is taking share away from Palm because people are saying, `I want to do more with my handheld,'" said Ken Dulaney, an analyst at market research firm Gartner Inc.
"Palm's philosophy has been long battery life, Compaq's has been more features, and today, people want features." Palm's sales fell 53 percent in the fourth quarter ended June 1, the company said June 26. Palm blamed a defect that delayed introduction of the new m500 device. The company's shares have fallen 79 percent this year, while Toshiba's have shed 21 percent.
Microsoft has gained 64 percent, and Compaq has risen 1.1 percent.
Sales growth in the US handheld market is slowing, yet Japanese shipments will increase to about 3 million units in the fiscal year ending March 2005 from 1.37 million in the year ended last March, according to Yano Research Institute Ltd.
Organizers using Redmond, Washington-based Microsoft's software rose to 27 percent of those sold last quarter from about 10 percent a year earlier, Waldman said. Palm's operating system, also used by Handspring Inc, had 57 percent of sales last quarter, he said.
The new Toshiba device has separate built-in slots for additional storage and for wireless connection to the Internet and e-mail. Generally, other organizers can provide only one of those functions at a time because the equipment for each needs the same slot, Waldman said, noting that many business users want both features.
Toshiba said it plans monthly shipment of 10,000 Genio handhelds, starting sales in Japan on Aug. 20. While it didn't set a retail price, it expects the standard model to sell for about ?70,000 (US$560) and a higher-end model for ?100,000, Naotake Kurotsu, an executive vice president at Toshiba's mobile communications company, said in Tokyo.
Given the relatively high prices, Toshiba said it's targeting corporate users. That means it will compete with Compaq, Casio Computer Co and Hewlett-Packard Co, which have all introduced Pocket PCs for business use. NEC Corp said on July 9 it will join the race.
Toshiba may have trouble competing with Compaq's products for business users because Compaq provides better customer support, Dataquest's Dulaney said.
The Genio organizer uses Intel Corp's strongARM microprocessor as the central processing unit, while a color screen and a rechargeable battery in the handheld are made by Toshiba.
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