Interesting news today....UPDATE 1-Microsoft kicks off Tablet PC with Compaq, Transmeta
(Updates with Microsoft and analyst comments, adds byline)
By Scott Hillis
SEATTLE, March 26 (Reuters) - Microsoft Corp. (NASDAQ:MSFT) on Monday moved closer to delivering its Tablet PC, signing up industry heavyweights to make the legal-pad sized devices that the software giant says will be more important than laptop computers.
The devices, a favorite show-and-tell concept of Microsoft Chairman Bill Gates over the past year, will run Windows XP, the upcoming version of Microsoft's computer operating system.
At a Windows conference in Anaheim, Calif., Gates said that top PC maker Compaq Computer Corp. (NYSE:CPQ) and upstart chip maker Transmeta Corp. (NASDAQ:TMTA) were among the companies working on Tablet PCs.
The deal was seen as an important win for Transmeta, which has touted its low-power chips for notebooks as an alternative to semiconductor titan Intel Corp.'s (NASDAQ:INTC) products. Transmeta shares rocketed as high as $21-5/8 before trimming the gain to close up nearly 18 percent at $18-13/16.
Microsoft shares fell 1/2 to $56-1/16.
Other partners include Intel, Taiwanese computer maker Acer Inc. (2306), and Japanese PC players Sony Corp. (6758) and Toshiba Corp. (6502)., and others.
NEW MARKET
Personal computer makers, faced with a slowdown in demand for chunky desktop PCs, have been looking for more slimmed-down computer hardware that can bridge the gap between desktop computers and tiny handheld gadgets like Palm devices.
Compaq, International Business Machines Corp. (NYSE:IBM) and others have seen promise in the tablet form -- which uses a pen or stylus to input and retrieve information.
"The initial positive response of the industry to Microsoft's Tablet PC initiative has exceeded our highest expectations," Alexandra Loeb, Tablet PC general manager, said in a statement.
The devices are also Microsoft's latest foray into designing hardware as it seeks to boost demand for its software amid the PC market slowdown. Its Xbox video game console is slated to go on sale later this year.
"It does everything that a notebook does and more, so everybody who likes a notebook today will love a Tablet PC," Leland Rockoff, Tablet PC marketing director, said in an interview.
"We see this as a replacement for the laptop. It's not an appliance, it's not a niche (product)," Rockoff said.
The idea is that it could be used by professionals to take notes in meetings, as well as within industries such as health care to take the place of forms, for example.
WINNING FORMULA?
By writing on a flat screen, Tablet PC users can make handwritten notes on an electronic document and then beam it wirelessly to others. The devices are also expected to be able to respond to voice commands.
"It enables people to interact with their PC in a more natural and intuitive way through digital ink or voice input," Gates said in a statement. "And it helps them use their PC more effectively in everyday tasks like taking notes at meetings, working collaboratively and reading electronic documents."
"The Tablet PC will be an even more important advance for PCs than notebook computers were," Gates said.
Analysts say it remains to be seen whether Microsoft can produce a winning formula for a device that has so far seen only limited use in some industries and whose cousin, the Internet appliance, has struggled to win fans.
"This is certainly Microsoft's attempt to move it (the tablet) into the consumer mainstream," said Rob Enderle, an analyst with Giga Information Group. "At this point it's an unproven market."
"We are going to have a class of machine that will be a tablet. I am not yet convinced that we understand what that machine will look like. We're going to see an awful lot of screwy things," Enderle said.
Tablet PCs are expected to hit the market in 2002 after Microsoft releases a modified version of Windows XP that will be optimized for mobile use, Microsoft said. Pricing has not yet been announced. |
