September 5, 2001 10:00 PM PDT

"Merlin" charms its way into HP handhelds

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Hewlett-Packard looks to cast a deeper spell on the corporate handheld market with new devices that incorporate Microsoft's Pocket PC 2002 operating system.

As previously reported, HP will announce two new Jornada handhelds Thursday at the Demomobile conference near San Diego. Software giant Microsoft will also be there to unveil Pocket PC 2002, the latest version of its operating system for handhelds. Until now, the OS was known by its code name, Merlin.

The two new handhelds, the Jornada 565 and 568, will be nearly identical except in memory capacity and price. The Jornada 565 will come with 32MB of memory and cost $599, while the Jornada 568 will come with 64MB of memory and cost $649. The devices will be available starting Oct. 4 and will come with a $50 mail-in rebate until the end of the year.

Other manufacturers using Pocket PC 2002 are expected to announce new products around the Oct. 4 launch of the OS. Compaq Computer, Casio and Toshiba use the Pocket PC OS in their handhelds and will likely adopt the new version. Toshiba's device, the Genio, is sold only in Japan but will be introduced in the United States later this year.

Pocket PC 2002 will offer more corporate-oriented features than its predecessor, as will the new Jornada devices themselves.

"We're aiming more aggressively at the enterprise this time around," HP spokeswoman Cherie Britt said.

The move is designed to build on the momentum the Pocket PC OS has already gained in the corporate handheld market. The business market has been the center of attention for handheld manufacturers lately because of its potential for growth. Businesses tend to buy devices in large volumes, compared with the single units that consumers purchase.

Pocket PC has been coming on strong in the small but growing corporate market because of prior relationships with business customers, according to analysts. Manufacturers of Pocket PC-based devices hope to continue the momentum. HP, which has also been a corporate favorite, is no exception.

HP has improved its hardware features by offering Intel's 206MHz StrongARM SA-1110 processor and adding support for 16-bit color. The company has also added a lithium-polymer battery and 8MB of flash memory for backing up data and applications in case the device runs out of power.

In addition, HP has strengthened its alliance with chipmaker Intel by announcing that it plans to bring voice communication and wireless capabilities to future HP products. HP will support Intel's Personal Internet Client Architecture, which essentially is a blueprint for building wireless communications devices.

Pocket PC 2002 will include software such as Pocket Outlook, Pocket Word, Pocket Excel and Pocket Internet Explorer. The Jornada handhelds will include Certicom's Movian virtual private networking software and HP's Microchai, which allows corporate users to develop Java-based applications.

"Compaq now has a viable competitor in the enterprise market, and (Compaq and HP) will have to fight it out," Gartner analyst Ken Dulaney said.

IDC analyst Kevin Burden isn't so sure.

"If HP ends up acquiring Compaq, one of the two handheld lines of the combined company will have to go away," he said. "And now that the new Jornadas are a lot more compelling than previous versions, it will be a tougher decision to make."

Compaq doesn't plan to introduce any new products Thursday but is expected to offer more details on how existing iPaq owners will be able to upgrade their devices. Unlike existing HP and Casio models, the iPaq has flash memory that can be upgraded with the latest software.

A new promotion that kicks in Thursday promises a free upgrade to Pocket PC 2002 to anyone who buys an iPaq between Sept. 6 and Nov. 30. A Compaq representative said the company has not set prices on the upgrade, but it will be in the range of $30 plus shipping and tax. The update, which is expected to be available around October, will come via a CD that can be installed on the iPaq via a host PC.

News.com's Ian Fried contributed to this report.

 

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