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Fight Club

Handheld OS rivals are coming out swinging.

Whatever happened to the Microsoft operating system monopoly? In the handheld computing world, its rival Palm OS is running up a75 percent market share over Windows CE. The CE operating system was left out in the cold by Everex, L.G. Electronics and Philips in 1999. Slow sales and shortages of color screens hastened those companies' exits. For consumers, insatiable battery consumption and difficult Pocket versions of Microsoft software have overshadowed CE's color screens and tight integration with big Windows.

But that won't stop Microsoft from trying. At the 2000 International Consumer Electronics Show in Las Vegas in January, Microsoft renewed its assault on the Palm fortresses with the birth of its "Pocket PC." Hewlett-Packard, Casio, Compaq and Symbol Technologies have all signed on to create new products for Microsoft's newest entry in the OS war.

Frank McPherson, proprietor of the Windows CE Knowledge Center (, a site offering support to CE users, says, "I find Windows CE consistent with Microsoft's strategy for operating systems in general. Provide the user with all the functionality they want, sometimes at the expense of performance. Some analysts will question whether this desktop OS strategy applies to handheld computing."

Consumers seem to agree with the analysts. And with Palm having introduced a color version, Windows CE loses one of its selling points. Microsoft will continue to flex its muscle and strategic partnerships to bring new Windows CE products to market, but anti-Microsoft sentiment and Palm Computing's own deals with Sony, Handspring and Nokia only improve the Palm OS position. The arrival of Linux handheld prototypes is another reason for Microsoft to sweat. You can find the latest developments at The Gadgeteer ( and PDA Street (

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This article was originally published in the May 2000 print edition of Entrepreneur with the headline: Fight Club.

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