Is Windows CE Dead on the Palmtop?

Users want Personal Digital Assistants (PDAs) in the enterprise, and developers want to be able to develop applications for them. But dead companies and products litter the road to success in the PDA market.

The PDA market experienced one near success with Apple's Newton, and one real success with 3Com's PalmPilot. Then, in an attempt to extend the company's desktop domination into the PDA marketplace, Microsoft introduced Windows CE. So far, Windows CE's results haven't been anything to jot home about.

Microsoft divides the Windows CE market into two segments: subnotebooks and palmtops. Examples of subnotebooks are NEC's Versa SX and AMS's TravelPro. These devices look like small computers, and the user interacts with the device by means of a keyboard. To interact with a palmtop computer, the user employs a stylus to tap on the surface or enter text.

The force behind Windows CE devices is that Windows users, which total 120 million or more, want an extension to their desktops. Microsoft specified a hardware reference platform, redesigned the Windows OS to keep the same system calls, and reduced the OS kernel's footprint to about 30 percent of Windows 9x's footprint. With 4 million Windows programmers available, the applications should arrive to make Windows CE devices compelling. For almost any feature (except battery life) that you can name (e.g., screen quality, multimedia capabilities), Windows CE devices win out over the PalmPilot. Even the prices are comparable.

Yet, more than 4 million people have bought PalmPilots so far, and these people don't want features or care about Windows. These users want an easy-to-use, easy-to-understand device that doesn't do too much but functions well. So, although Windows CE devices are receiving mixed reviews, palm-sized device sales are taking off.

The PalmPilot is leading the PDA market because it has an interface that novices understand. The PalmPilot also has the applications it needs, a dedicated developer community, and wireless Internet connectivity. The PalmPilot has everything necessary to push into the enterprise marketplace. According to analysts and reviewers, Windows CE devices are trailing because the interfaces are confusing and battery life is poor. Other reasons that analysts cite for the slow acceptance of Windows CE devices are that compelling applications don't yet exist for these devices and that, in the past, synchronization with the desktop has had bugs.

Perhaps palm-sized devices that support Windows CE Professional Edition will have a chance. Jill House, a research analyst at International Data Corporation (IDC), said that many companies are interested in using development tools such as Visual Basic (VB) to develop applications on Windows CE. House expects that the platform might see a revival if users want better multimedia capabilities and better Internet access.

House recently conducted a study of the PDA market and pegs the market share for palm-sized devices at close to 85 percent. The NPD Group reported that Palm Computing (3Com's subsidiary) held 78 percent of the US PDA market in third quarter 1999, up from 76 percent in 1998. According to The NPD Group, Windows CE devices declined from 22 percent to 15 percent market share over the same period.

Microsoft unveiled Windows CE 2.12 in August 1999, but the company missed major sales because it failed to release Windows CE 3.0 (code-named Rapier) devices in time for Christmas sales. Rapier made its appearance in January 2000 at the 2000 International Consumer Electronics Show (CES) and gained the name Pocket PC. Microsoft demonstrated Pocket PCs running Microsoft Reader with ClearType and Windows Media Player. Windows CE 3.0 will likely spawn new devices and new uses.

For a palmtop computer, the Windows CE screen has too much going on. You might think that Microsoft will correct this problem, but I'm not optimistic. In a recent press conference, Microsoft President and CEO Steve Ballmer stated that Microsoft wouldn't change the interface. Noting the simplicity of the PalmPilot's interface, Alan Kessler, president of Palm Computing, said, "The [PalmPilot's] success wasn't in what we put into the device but in what we left out."

Windows CE isn't dead, not by a long shot. Windows CE is going to show up in all sorts of devices—for example, Internet terminals, home devices, embedded systems, and devices that need an OS with some realtime capabilities. Microsoft will have its hits and misses, but Windows CE's time to be the major player in the PDA market seems to be running out. Microsoft needs to learn the lesson that Windows CE's slow acceptance teaches and move on. The lesson is that small devices powered by Windows CE are favorable because developers can use existing knowledge to create applications for them, but on small devices, looking at Windows isn't pleasant.