Microsoft Touts Pocket PC Sales, Sees More Growth
By Scott Hillis
SEATTLE (Reuters) - Microsoft Corp. (Nasdaq:MSFT - news) said on Tuesday that sales of handheld computers built on its Pocket PC platform -- the software leader's answer to Palm Inc.'s (Nasdaq:PALM - news) popular devices -- have surpassed 1 million worldwide and are still building momentum.
``Our growth is very much trending up in a month-over-month situation,'' Ed Suwanjindar, a product manager with Microsoft's mobility group, said in an interview.
``We continue to beat our numbers from the prior month. Our OEMs (original equipment manufacturers) are ramping production and we're gaining a lot of traction with all our key audiences,'' Suwanjindar said.
The Pocket PC is based on Microsoft's Windows CE, a slimmed-down cousin of its operating system for desktop computers. Popular Pocket PC models include Compaq Computer Corp.'s (NYSE:CPQ - news) iPAQ, Hewlett-Packard Co.'s (NYSE:HWP - news) Jornada and Casio Computer Co. Ltd.'s (6952.T) Cassiopeia.
The 1 million sales mark is only a small fraction of Palm's base of 13 million users, which make up about 80 percent of the total market for handhelds.
On the other hand, Microsoft says the Pocket PC is avoiding the inventory woes that have plagued Palm in recent weeks and have forced it to trim quarterly revenue forecasts by about half.
Shares in Microsoft rose $1.20, or 1.74 percent, to $69.99 in late Nasdaq trading on Tuesday while Palm shares jumped 64 cents, or 10.77 percent, to $6.58.
DIFFERENT STRATEGIES
Microsoft's strategy differs from Palm's.
Palm has focused on simplicity, letting users easily manage appointments and addresses and compose short memos from slim devices with black-and-white screens.
Microsoft-based Pocket PCs, however, are stuffed with color screens, more memory and small versions of its Word word-processing software and Excel spreadsheet, as well as the ability to play audio and video.
That has given it a 26 percent slice of the market for devices that cost more than $350, Microsoft said, citing data from market research firm NPD Intelect.
``There's one segment of the market where we are hammering away and that is the high-end device market; we are seeing tremendous traction there,'' Suwanjindar said. ``That is a core area because that is where the money is being made in this business.''
The Pocket PC is most popular among large corporations, Suwanjindar said.
``We're really putting the brunt of our investment, from a development and marketing perspective, in the higher-end market. People want more than just a simple organizer. They need to get a lot of value from them,'' Suwanjindar said.
Suwanjindar declined to say if the Pocket PC was a profitable business for Microsoft, but said it was key piece of a broader strategy to tie information and services across different computing devices.
``We wouldn't get into any business unless we thought there was a tremendous opportunity for profitability,'' Suwanjindar said. ``We think of it in larger terms than just a device.'' |
