November 25, 1999
Why Doesn't Windows CE Get Any Respect?
When It Comes to Personal Organizers, Microsoft's Minisystem Does Not Rule the Market
By KATIE HAFNER
ou wouldn't expect to find a better spokesman for the Philips Nino than Blake Patterson. If you visit the Philips Electronics Web
site, you see a prominent link to a site built by
Patterson, a 27-year-old Web designer from Alexandria, Va. Philips points to Patterson as a
dedicated user of the Nino, the company's palm-size computer. Predictably, Patterson's site is
a veritable shrine to the Nino.
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Shana Raab for The New York Times
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DEFECTOR -- Blake Patterson once posted paeans to the Nino, a Windows CE organizer, but he has been lured to the Palm operating system.
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The only problem is that Patterson has not
used a Nino, or, for that matter, any device running
Windows CE, the simplified version of Microsoft's
Windows operating system, for more than six
months. Last summer, he soured on CE altogether
and after a brief but happy fling with a Palm
organizer, became a fervent early convert to the
new Visor from Handspring, a startup that has
licensed the Palm operating system. Patterson, who was once paid by Philips to write about the
Nino, has not touched his Nino fan page since late
last year and it now hangs, petrified, in cyberspace
(nino.philips.com/community).
Meanwhile, Patterson is busy building a new
Web site that is devoted to miscellaneous handheld
gadgets. "I don't think I'll have much positive to
say about CE, if I address it at all," he said.
As it turned out, Philips wasn't far behind
Patterson. Late last summer, the company decided
to drop the Nino from its product line, citing
disappointing market growth. The company is still
selling the Ninos in stock, said Marty Gordon, a
Philips spokesman, which is why the Nino Web
page is still up.
When Microsoft first announced Windows CE
three years ago (CE does not stand for anything),
hardware manufacturers like Philips were quick to
start producing handheld devices to compete
against the popular Palm organizer, which has its
own operating system, called the Palm OS. Industry analysts' projections were so rosy they implied
that Palm Computing should run for cover.
But a very different picture has emerged since
then. According to NPD Intelect Market Tracking,
a research firm in Port Washington, N.Y., personal
digital assistants running CE account for just 15
percent of the P.D.A.'s sold; 75 percent run the
Palm OS. "It's not growing at all," said Nazia
Khaliq, an account manager at NPD Intelect.
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Microsoft's system is
popular for things like cell
phones, but not P.D.A.'s.
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Microsoft may be the software giant, but when it
comes to Windows CE, it has certainly not stifled
competition or gained control of the market. In
fact, in the portion of the CE market that consists of
handheld organizers, the giant is stumbling.
Just last week, as William H. Gates, the
chairman of Microsoft, was at the Comdex
trade show, showing off a small new $200
CE-based Internet access device called the
MSN Web Companion, another corner of the
show was humming with the news that Sony
and Palm Computing had signed a deal to
work on a new generation of handheld devices using the Palm OS. Soon afterward,
Everex confirmed rumors that it would
discontinue its CE devices because of slow
sales.
Palm's sales, in the meantime, continue
to grow, and, with the exception of some
serious shipping glitches, Handspring is off
to a promising start with its relatively inexpensive Visor.
But as Microsoft is quick to point out,
Windows CE is not just for organizers. It is
making its way into a variety of products,
like digital set-top boxes, game consoles,
cell phones, Internet appliances, cars and
even automated gasoline pumps. If such
products are taken into account, said Rogers Weed, director of Windows CE marketing at Microsoft, sales of CE licenses to
various manufacturers are up more than 50
percent for the year, compared with sales at
this time last year.
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A WINDOWS CE ROUNDUP
 indows CE started out in 1996 running on handheld PC's, called clamshell devices because they pop open
to reveal the screen. Then CE gadgets
got even smaller. Clamshells are still
being sold, but the most popular CE
personal digital assistants are the
ones called palm-size, or pocket-size.
These P.D.A.'s all have pocket-size
screens and use styluses:
CASIOPEIA
Casio's popular E-100 Casiopeia, with 16 megabytes of RAM,
retails for $499 and is a pocket-size
PC with a color screen. The upgraded
$599 E-105 has 32MB and includes
multimedia software that lets you
view video clips and listen to music.
Casio also has one monochrome version.
PHILIPS NINO
Philips Electronics has
stopped making these but is still selling its stock. The $299 color Nino 500,
the most popular model, is used mostly for schedule and contact data. It
has a voice recorder and speech recognition.
COMPAQ AERO
The $299 ultraslim
Aero 1500 is the thinnest (a half-inch
thick) pocket-size Windows CE PC. It
is also light. The $369 color version,
called the 2100, has a car adapter, a
touch-sensitive display and three
alarm settings.
HEWLETT-PACKARD JORNADA
The Jornada 430se ($499) has 16MB of RAM.
It plays MP3 music or audio files and
can be used to view digital photos and
record memos. Its 133-MHz processor
should make it as quick as lightning,
but doesn't.
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But for pocket-size and larger handhelds,
something has not clicked for Windows CE.
What is the problem? The answers, from
both analysts and consumers like Patterson, vary widely, but include explanations like these: The price is too high. Microsoft misjudged Palm's momentum. Compared with the relatively simple Palm OS,
the CE interface is too difficult to use. The
devices are too bulky. The quality is poor.
The feature-laden devices promise too
much and deliver too little.
Tom Rhinelander, an analyst at Forrester
Research, boiled it down to this: CE is too
rudimentary to act as a suitable substitute
for a real computer and too complicated to
run on a P.D.A.
"What Microsoft tried to do was take the
entire PC experience and cram it down into
a tiny little screen," Rhinelander said.
"Their theory was that people knew and
understood Windows and there would be
value in retaining the look and feel, and that
was absolutely false."
Chris Shipley, publisher of DemoLetter,
an industry newsletter, agreed: "I don't
think you want a Windows computing experience in a palm-size device. You want to
look up addresses. You don't want a Start
button."
Another, related criticism is that both the
palm-size devices and the slightly larger
handhelds, which usually come with a small
keyboard, are too packed with capabilities
-- that the novelty of downloading video
clips and watching them on a tiny screen
wears off quickly.
That isn't to say that consumers have
given up trying to like CE devices. Michael
Anderson, an engineer in Marlborough,
Mass., who confesses to a weakness for
gadgets, has been buying CE devices since
they first came on the market, searching for
the perfect one. With each new device, his
hopes rise, then quickly fall again.
Anderson's experience with CE devices over the years has been a bit like being
enticed by a travel brochure into buying a
vacation in paradise, only to arrive and find
the hotel bad and the food worse.
Most recently, Anderson bought a
Hewlett-Packard Jornada 680, one of the
company's latest offerings in the CE line.
"I really thought the 680 was going to be
it," Anderson said. "From the spec
sheet, it should be the most amazing thing
ever." The specifications sheet lists an internal 56,000 bit-per-second modem, 16
megabytes of internal memory, Internet e-mail support, a 6.5-inch color screen, a keyboard large enough to type on, built-in voice
recording and a 133-megahertz processor
(compared with a 16-megahertz chip on the
Palm).
But after using the Jornada for a few
days, Anderson again grew frustrated.
In spite of the faster processor on the Jornada, he said, his more efficient Palm V was
faster. "It's a great example of where something should be the most amazing thing
ever, but it's still not all that fast and the
apps are underpowered."
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Larry Davis for The New York Times
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Rogers Weed, marketing director for Windows CE, showings off products that use it.
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The CE apps, or applications, Anderson is referring to are pint-size versions of
Windows-based programs like Excel, Word
and PowerPoint. Not only do they fall short
of doing all that a full-blown Windows program can do, but the small screen renders
many of their features useless, Anderson said.
Josh Bernoff, an analyst at Forrester
Research, said, "Once you've got a screen
that's small enough that you can't really run
Windows, you ask yourself, what is this
for?"
Not everyone feels that way. Many people
swear by their Casiopeias, their Hewlett-Packard Jornadas and their Compaq Aeros.
Aaron Driver, a supervisor for the California Transportation Department in San
Francisco, recently bought a Nino, which he
uses to keep track of daily appointments
and contacts and for e-mail while on the go.
Driver said he and a friend who uses a
Palm both agreed that the Nino was easier
to use.
Gary Rado, president of Casio in Dover,
N.J., said customer demand for the newest
Casiopeias far outstripped supply. The company has nearly 10 percent of the market for
handhelds, he said. One of the reasons the
Casiopeia is so popular, he said, is its crisp
color screen. "A lot of people are downloading video and film clips," Rado said. He
agreed that people's enthusiasm for doing
so might wear off but said their enthusiasm
for the screen would not. "People like the
vibrant display," he said.
Weed, at Microsoft, acknowledged
that sales of CE pocket-size devices had
been less than robust. But he pointed out
that sales numbers like those gathered by
NPD Intelect took into account only retail
sales. Many more CE devices are sold directly to businesses, some for specialized
applications.
That is certainly true for Dr. Grant Peoples, a family doctor in Aurora, Colo., whose
office recently bought a half-dozen Journada 680's.
Dr. Peoples said he was happy
with the device but used it for just one thing:
entering diagnoses and ordering prescriptions. He has no plans to use it for scheduling, let alone for getting access to e-mail or
the Internet, creating spreadsheets or doing
any of the other things the device can do.
Microsoft has no intention of conceding
any of the market for pocket-size computers
and larger handhelds. "If you look at the
people in the game in a serious way, they're
all continuing to innovate," Weed said.
Compaq, Casio and Hewlett-Packard have
all made smaller, easier-to-use devices with
better color displays, digital music support
and faster processors, he said.
"I don't think we've seen the end of it by
any measure," said Ms. Shipley, of DemoLetter. But if manufacturers like Philips are
going to take a second look at CE, she said,
"I do think it has to be a much different
implementation."
Diana Hwang, an analyst at the International Data Corporation, agreed. "I don't
think Microsoft would give up the handheld
space unless they just really can't do it," she
said. "Microsoft always comes back. Their
challenge is the next generation of CE."
The development of that next generation,
Weed said, is already well under way at
Microsoft. Sometime next year, he said, an
updated version of CE will start showing up
in new handheld products. Weed refused
to elaborate because, he said, he does not
want to discourage people from buying
products currently on the market.
Rado, of Casio, said his company had
no intention of abandoning CE. On the contrary, Rado said, Casio is busy developing a new device based on Rapier, Microsoft's code name for the updated version of
the CE operating system. "When Rapier is
ready to go, we'll have our models available," he said.
Patterson, the disillusioned No. 1 Nino
fan, may have defected permanently. But
the persistent promise of a smaller, slicker,
faster, easier, lighter CE device helps explain why people like Anderson keep
coming back for more.
Related Sites
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nino.philips.com/community
