October 15, 2002 4:38 AM PDT

Microsoft delays "smart display" push

Microsoft has benched "smart displays" for the couch-potato set, delaying the launch of the handheld flat-panel screens until the first quarter of 2003 so that it can fine-tune the underlying software.

Microsoft Chairman Bill Gates introduced the software, then code-named Mira, at the Consumer Electronics Show in January. The company's goal was to make the software, now known as Windows CE for Smart Displays, available by this time of the year so that hardware makers could introduce devices for the holidays.

"We now expect the products to reach the market (in) the first quarter of next year," said Microsoft's Megan Kidd, a product manager responsible for the specialized operating system. "We worked hard to deliver during this holiday season, but we wanted to make sure we delivered a high-quality product. So things are a little later than we expected."

Kidd gave no other reason for the delay. She did emphasize, however, that development is "in the homestretch" and that Microsoft's hardware partners were doing "final testing."

Smart-display devices function like a portable PC monitor, which consumers can use to surf the Web and conduct e-commerce. A home PC, however, is also necessary to provide a connection to the Internet. The Smart Display software captures information wirelessly from the PC and repositions it on the portable screen.

Analysts were skeptical that Microsoft would deliver even during the first quarter, citing problems with the product. For example, the display devices are intended for the consumer market but require that the more expensive, business-oriented Windows XP Professional be running on the connecting PC.

"I wouldn't be surprised if it slips further," said Directions on Microsoft analyst Matt Rosoff. "It seems not to be the highest-priority product at this time."

Another problem affects connectivity. Currently only one Mira device can connect at a time to a PC, limiting some functions in households where several people share one computer.

Kidd downplayed any significance to missing the holiday rush. "Looking at who we would think would buy the first version--sort of the gadgety-type users--the holidays wouldn't be as important to them," she said.

Clearing the way for tablet PCs
Devices based on Windows CE for Smart Displays should not be confused with those built around Microsoft's Tablet PC, which the company plans to launch on Nov. 7. Tablet PCs are also portable screens with a pen and handwriting-recognition capabilities, but unlike Smart Display devices, a tablet PC is a fully functional computer.

Rosoff sees tablet systems as the larger reason for Microsoft pushing back the release of Windows CE for Smart Displays.

"They really want Tablet PC (devices) to be the 802.11b wireless walk-around-the-house device, but there's too much potential sales confusion with Mira," he said. "Tablet PC is more important to them, and they don't want to interfere with it."

Fujitsu, NEC, Philips Electronics, TriGem Computer and ViewSonic are among the manufacturers working on Smart Display machines. More than 15 companies have committed to making such systems.

The Smart Display devices are expected to sell in the range of $800 to $1,000, depending on whether an 802.11b wireless networking base station is bundled in, Kidd said.

 

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