Microsoft preps new handheld OS

Microsoft later this month will unveil the next version of its handheld operating system, as hardware partners new and old line up with devices using the OS.

The Redmond, Wash.-based software giant will debut Pocket PC 2003--code-named Ozone--on June 23, according to sources close to the company. The operating system is not expected to be a major revision of Pocket PC 2002, but it will include new features such as built-in support for wireless technologies Wi-Fi and Bluetooth. The OS overhaul will occur in the next version of the operating system, code-named Magneto, due out next year.

Microsoft representatives declined to comment.

Hewlett-Packard and Gateway are both expected to announce new products using Pocket PC 2003. Gateway, a newcomer to the handheld market, confirmed that it will introduce a midrange device using the OS on June 23.

Meanwhile, HP is expected to release this month a handful of new iPaq devices--recently approved by the Federal Communications Commission--that likely will use Microsoft's new OS, sources close to HP say. Two of the devices, to be called the iPaq h1930 and the iPaq h1940, will be added to the low-end 1900 series and will come with a built-in Bluetooth chip. The FCC also approved iPaq h2200 devices that come with an Intel XScale PXA255 processor for handhelds and a built-in Bluetooth chip. The sources say HP also will announce two high-end devices for its iPaq h5500 series, both of which will come with Bluetooth. HP declined to comment on the devices.

Microsoft has been increasing its share in the handheld OS market, recently signing on major manufacturers such as Dell Computer as hardware partners. More than 30 manufacturers currently use various versions of the Pocket PC operating system in handhelds. The software giant remains the No. 2 player in the market, behind Palm.

The handheld market has seen shipments slide over the last couple of quarters, partly as a result of major player Handspring shifting its focus from handhelds to combination organizer-cell phone devices. But other big names such as Dell and Toshiba, which both use the Pocket PC OS in their devices, are slowly filling the void, according to data from research firm IDC.

In the first quarter, Dell shot up to the No. 4 spot, with 6.5 percent of worldwide shipments, from No. 11, and Toshiba picked up 3.6 percent of the market. Toshiba managed to increase shipments 306 percent in the first quarter from the same period a year ago. Handspring fell in the No. 7 spot, with 2.9 percent.

Magneto, the next version of Microsoft's Pocket PC OS, is expected to include improved phone features, such as more intuitive dialing capabilities, and will likely be more flexible so that it can be used in a wider variety of devices such as appliances.