Palm OS continues its dominance of Windows CE/PocketPC

Compaq Computer announced this week that it shipped 75,000 PocketPC devices in the second quarter of this year, and the company plans to ramp up production so that it can quadruple output by the first quarter of 2001. But the run rate for the Windows CE-based PocketPC is decidedly lower than market leader Palm, which shipped 1.1 million devices in the same time frame. Even with the other PocketPC makers included in the tally, Palm is currently outselling the PocketPC by a factor of at least 5-to-1. And with Palm-compatible devices such as Handspring and Sony prepping new models for the fall, things aren't looking too well for Microsoft's handheld OS. Compaq CEO Mike Capellas told CNET this week that his company would put up a fight, however, and target wireless connectivity.

"The \[wireless\] delivery of content in a meaningful way will drive the \[handheld\] industry," Capellas said. "There is going to be a ton of new Internet content, and that is what is going to drive the Web." As for demand, Capellas notes that Compaq hasn't been able to keep up. PocketPC devices, which normally retail at $500, were selling for as much as $1000 on auction sites like eBay. Compaq has had trouble obtaining the screens its needs from suppliers, but the company agrees that it could have done a better job meeting the demand.

Users of PocketPCs are largely enthusiastic about the devices, in a manner similar to old Amiga and Macintosh customers. PocketPCs sport brighter, more colorful screens than their Palm OS equivalents and are far more feature packed. But critics note that this increases the size, weight, and complexity of the devices, not to mention the cost. Software is also a critical component of any platform's success, and on that note, the Palm is the clear victor. But Microsoft has a history of fine tuning products over time, and the company certainly has the cash reserves to keep Windows CE afloat indefinitely if need be. With close partners such as Compaq and Hewlett Packard providing much-needed publicity for the devices, it's remotely possible that a future release could finally even the score

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