META Report:Pocket PC 2002
In the past, Pocket PC (and earlier Windows CE) PDAs have been criticized for their relative complexity of operation and lack of simple facilities when compared to the rival Palm OS-based PDAs. Pocket PC 2002 has made many of these operations simpler and more user-friendly, and though its interface still is more complex than that of Palm, for many users it offers much greater capabilities that make up for such complexity. Indeed, with its Pocket Outlook, Pocket Word, Pocket Excel, and Pocket Internet Explorer, enterprise users find a close affinity to the Microsoft-dominated PC world of their daily desktop applications, and an easy connection for users of Exchange.
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Microsoft has also mandated that all Pocket PC 2002 PDAs use flash ROM to hold the operating system. Although this adds an incremental increase to the price of the units, it enables the vendors to provide downloadable upgrades for the OS that can be flashed into ROM. Previously, only Compaq's iPaq and some Palm PDAs provided this capability. Owners of PDAs that do not use flash ROM cannot upgrade their systems when new versions of their OS appear. Owners of PDAs from other suppliers are required to buy a new unit if they want the latest version of the OS - a costly pill to swallow for users that paid $600 for a device.
Manufacturers that move to flash will alleviate this problem, but such a move will also enable them to add enhanced features and functions and upgrade those functions (including customizations for particular enterprise users - i.e., special screens, customs portals, drivers, etc.). And while black-and-white units are possible, we expect vendors to offer only color units (a recent black-and-white iPaq offering did not sell well).
All this processing power, color display, backlighting, and peripheral support come with a price in battery life, and many users have complained that previous versions of Pocket PC devices have had very limited battery life. (Pocket PCs are much more power-hungry than Palm devices.) New versions of Pocket PC PDAs include high-power Lion batteries, and several are designed with removable batteries for user-swapping during extended use so recharging can be done less often.
Microsoft's clear focus on the enterprise is evident in its strong support for multiple networking technologies. Under the covers, Microsoft has added drivers for both Bluetooth short-range wireless and 802.11b wireless Ethernet, enabling Pocket PCs to run either built-in wireless interfaces (in future units not yet on the market) or interface cards. This will be an interesting feature for users in offices equipped with 802.11b wireless LANs, enabling them to check and send e-mail, or check internal information sites and even Web sites from wherever they happen to be in the office or on the plant floor. The latest version also supports virtual private networks and has a Windows Terminal Server client included to provide network encryption and strong authentication to corporate networks, and enable thin-client access to enterprise applications.
Pocket PC has also lagged Palm in the number of third-party software developers selling products for the platform. Although some Palm products (e.g., several word processors and spreadsheets, e-mail attachment viewers, e-mail interfaces) are essentially replacements on the Palm platform for Pocket Office and other native Microsoft functionality, others offer a wide variety of personal and potential corporate functionality. However, an increasing number of those developers and others are bringing out software for the Pocket PC 2002 platform.
Despite Palm's early lead in development support, Microsoft has an incredibly large audience of potential developers already using its development environments (e.g., Visual Basic). As it adds Pocket PC-specific libraries and tools, Microsoft will rapidly surpass Palm in enterprise software deployments. Further, Microsoft is producing a version of .Net Compact Framework to work with the Pocket PC (and other WinCE platforms), giving these devices an advantage over Palm in future .Net environments.
Microsoft has also improved remote manageability features on the Pocket PC with an eye to the needs of corporate users; among the additions are hooks for security software. PDAs face two important security challenges. First, like desktop computers, they are vulnerable to virus and worm attacks - though so far, only a few minor attacks have materialized. However, by their nature, they are less susceptible to data loss than desktop systems, because PDA users back up their data to desktops (and, if they are wise, from there to a server or removable media) regularly to guard against file corruption, battery failures, and other events that put data on PDAs in general at risk. Therefore, users can always wipe the memory of their PDA and reload their last backup if a virus does attack. Although some antivirus software has appeared for Palm (Symantec), we see this as a fairly low-risk situation.
The second - and larger - danger is theft or loss of PDAs that contain sensitive corporate data. This is not new - laptops have been stolen or left behind in the past, and even desktop PCs have been known to disappear from offices overnight. However, PDAs in general are much more susceptible to loss and theft because of their small size. The main protection approach against this problem is encryption of the data on the unit and/or removable data storage (e.g., CompactFlash). Although several solutions are available for both the Pocket PC and Palm platforms (e.g., Certicom), so far few users have encrypted their PDAs because of the inconvenience. We do not expect this to change until such encryption is forced on users by enterprise policies.
User Action: Although Pocket PC 2002 devices can replace laptops for the minority with limited needs on the road (e.g., access to e-mail and form-based access and entry to some enterprise applications), for most mobile users this will still be a companion device rather than a replacement for a laptop.
The growth in the number of Pocket PC makers can enable enterprises to play one off another to get the best deals when planning to roll out PDAs to parts of their user populations. However, before they start such a program, companies must establish clear policies on how they will support use and what use is permitted.
Companies that have standardized on Microsoft environments (e-mail, development, etc.) will find a closer affinity to the Pocket PC than to Palm PDAs, and with its greater processing power, expandability, and connectivity options, we expect enterprises to move in greater numbers to Pocket PC and away from Palm devices. Also, enterprises will be much more comfortable working with a large enterprise supplier, such as Compaq or Hewlett-Packard, than a small, less financially stable vendor, such as Palm or Handspring.
META Group analysts Jack Gold, David Cearley, Ashim Pal, Peter Firstbrook, Jeffrey Mann, Val Sribar, and William Zachmann contributed to this article.