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To: JohnG who wrote (41926)9/20/1999 11:57:00 AM
From: Ruffian  Respond to of 152472
 
In the Palm of your Hand, WSJ>

September 20, 1999

In the Palm of Your Hand

Companies are searching to fit the Web
on the screens of hand-held gadgets

By LISA BRANSTEN

In the mid-1990s, PalmPilot creators Donna Dubinsky and Jeff Hawkins
argued with dozens of venture capitalists that their hand-held computers
shouldn't come with wireless applications.

Ms. Dubinsky, founder of Palm Computing, now owned by 3Com Corp.,
recalls that although adding wireless communications to the original Pilot
would have been nice, the price was too high: It would have turned the little
hand-held device into a big machine with a short battery life -- exactly what
they were trying to avoid.

They got their way -- although only by selling the company rather than
taking venture capital -- and the PalmPilot was a hit, in large part because
of its shirt-pocket size and the fact that, unlike competing devices, it didn't
try to do complex things like accessing the Web.

But five years and a Web generation later, the
duo have changed their tune. The last device
designed by Mr. Hawkins before he and Ms.
Dubinsky left 3Com to form a new company
was the Palm VII, which incorporates wireless
access to a limited number of Web sites -- on
a device not much bigger than the original
Pilot.

What happened? Massive changes in wireless
technology, and the culture at large, have
made it easier to add Internet applications to
palm computers and other small electronic
devices such as cell phones and pagers. And a
number of companies -- from mobile-phone
makers and wireless-service providers to tiny
software start-ups -- are trying to exploit those changes, developing ways
to scale down Web content to fit on those minuscule screens.

The E-Mail Push

"As e-mail has become a more important element in the lives of everyone
from students to executives, the demand for ways to get that information
remotely may do for wireless devices what voice mail did for cell phones,"
says Andy Seybold, a wireless consultant in Boulder Creek, Calif. "When
cell phones came out in the '80s, voice mail was just coming of age, and
the two went hand in hand. Now, e-mail is just coming of age, and we
have [wireless] data services -- and the two also go hand in hand."

Many companies are trying to do more than just provide e-mail, however.
They're designing scaled-down versions of Web browsers that work in the
limited display space of hand-held gadgets.

Mobile-phone makers, for example, are rushing to put software in their
handsets that will allow for Internet surfing on the phones' display screens.
Qualcomm Inc., of San Diego, is putting a special phone browser
developed by Phone.com Inc., of Redwood City, Calif., into its entire line
of Thin Phones -- a line of smaller phones designed specifically for Internet
applications. The phones are only two-thirds of an inch thick and two
inches wide, but feature larger-than-average five-line screens.

Meanwhile, Motorola Inc. is putting Phone.com's browser into its i1000
Plus series of phones. Sometime between 2002 and 2005, nearly all
Motorola phones will come with a Web browser installed, says Jim
DeBelina, director of strategy for the Internet and networking group at the
Schaumburg, Ill., electronics company.

The browser helps you find things on the Web by taking you through a
series of scrolling menus. When you start your phone, one of your options
will be to launch the browser. Then you'll be able to scroll through
categories -- sports, health, finance, travel and more. Those categories will
then point to a series of Web sites, and the browser will translate them so
that they display only the sites' text on the page. Users can also set up
bookmarks for favorite Web sites.

"Over time, you're going to see an increased importance of these devices
to people's everyday lives," says Rob Bennett, group product manager for
the consumer and commerce group at Microsoft Corp. The Redmond,
Wash., software company's goal, of course, is to make sure that if there is
a new platform for accessing the Internet, it is a Microsoft platform.

Any company that fills this niche will have to confront a few basic
problems. One is that sites -- primarily those that are graphics-intensive --
may not work well with microbrowsers unless they're specially formatted
for the devices' small screens.

Some devices solve that problem by working only with specially formatted
sites. In order to give the Palm VII about two weeks of battery life and still
keep it relatively small, 3Com has equipped it to do only what the
company calls "Web clipping" rather than full-scale surfing. That means
users can do very specific tasks -- looking up someone's phone number or
getting driving directions from sites that have agreed to create scaled-down
versions for palm-computer users. (A Web site that wants to make a
Palm-friendly version can use a set of tools provided by 3Com.)

The device's e-mail capabilities are also limited: The Palm VII can
download only two screens' worth of a message at a time -- about 500
characters -- and doesn't accept attached files.

Getting Small

Several start-up companies -- including AvantGo Inc. of San Mateo,
Calif., and ProxiNet Inc. of Emeryville, Calif. -- are attacking the size
problem by serving as go-betweens that reduce Web pages to a more
manageable size. Users attach wireless modems to their Palms -- not
including the Palm VII -- or to the hand-held devices that run on
Microsoft's Windows CE operating system. AvantGo and ProxiNet's
software then strips down Web content -- by removing the graphics from
Web pages, for example -- so it can be viewed on the hand-held's small
screen.

But that strategy has some very real limitations. Wireless modems are
bulky, coverage is limited and data-transmission rates can be slow. So,
while such software can be great for grabbing bits of information, it is far
from the ideal way to surf.

Felix Lin, chief executive of AvantGo, estimates that only about 10% of the
100,000 or so people who are using AvantGo are using it wirelessly.
(Most people still use the application to download and convert Web pages
while their PalmPilots are attached to their personal computers and
receiving data from them.)

Other companies are working to scale the Web down even further,
breaking Web pages down into bits of text intended for the tiny screens of
pagers and mobile phones. Such services have already found big audiences
in Europe. Yankee Group, a Boston market-research firm, found that
about 700,000 mobile-phone users, or 11% of those using the services of
U.K.-based Orange PLC and Vodafone AirTouch PLC, receive text
messages on their mobile phones through services known as SMS, or short
messaging services.

While most of those people are using the service for personal messages,
Yankee suggests that in some places SMS has caught on as a way to grab
Internet content via a version of "push" technology -- users subscribe to
services that e-mail news updates, sports scores and other information. In
Finland, for example, Yankee Group estimates that about 25% of all the
short messages sent to subscribers of Sonera Group Oy's phone service
are content such as jokes, scores and travel information.

Microsoft has taken such a text-based approach in its first stab at a
"wireless portal" -- a starting point users turn to when they first go online.
In June, the company launched MSN Mobile, which sends information to
pagers and mobile phones equipped to receive short text messages -- from
50 to 500 characters, depending on whether they are as simple as a stock
quote or as complex as a news story. The rate of transmission depends on
the carrier and traffic levels; on a fast carrier, the messages pop up almost
instantaneously.

At the moment, Microsoft is pushing information such as weather
conditions, stock prices and horoscopes to users who register at the MSN
Mobile site, with the service available free to any consumer with a phone
that can receive text messages. Basic accounts are free, and there is a
$9.95 charge for premium services. Consumers will need the premium
service for news headlines and sports news and to get more than 10 stock
quotes a day.

By year's end, the software giant hopes to let consumers using certain
wireless services grab information off the Web when they want it.

So far, Microsoft has announced a deal only with Nextel Communications
Inc., but Mr. Bennett says the company plans to offer deals to other
wireless-service providers. Ultimately, he says, the plan is to create a
commerce portal that will allow users not only to get information they need
but also to make transactions based on that information. For example,
consumers could set up a system that notifies them if a flight is canceled,
then access a travel area where they could actually book a ticket for an
alternative flight.

A Way In

Web portal Yahoo! Inc., of Santa Clara, Calif., and Sprint PCS Corp., a
wireless firm controlled by Kansas City, Mo., long-distance carrier Sprint
Corp., are working on a similar product that will integrate a user's e-mail,
online calendar and address book with other content available from
Yahoo's site, such as weather and horoscopes, and allow Sprint PCS
customers to access them on mobile phones.

Much like MSN Mobile, in its first iteration this service will consist of
messages sent to consumers' phones. The arrangement allows for
messages of up to 120 characters that should load very quickly, depending
on network traffic.

Separately, in August Yahoo launched Yahoo Mobile, a reformatted part
of the company's Web site that consumers can access wirelessly to get
stock quotes and other basic information. To use the service, consumers
have to download special browser software.

Another would-be wireless portal is AirFlash.com Inc., a Redwood City
start-up with plans to help consumers with browser-enabled phones find
nearby products and services. To use the service, consumers call a special
number and enter a ZIP Code to indicate where they are. Then they can
choose from a series of categories, much like a phone-mail tree, to help
them find the business they are looking for. Among the options are food
and dining, hotel and travel, and entertainment. Each category is then
divided into smaller categories and subcategories, such as restaurants and
then Mexican restaurants. When consumers get to the option they want,
AirFlash will send out short messages: the Mexican restaurant's address
and telephone number, for instance.

Rama Aysola, chief executive of AirFlash, says he plans to introduce a first
version of the service in September once he does a deal with a wireless
carrier. As with Microsoft, his plan is ultimately to allow transactions --
such as ordering flowers -- to be completed right over the phone. A later
version of the service, he says, will pinpoint location based on the cell a
user calls in on, eliminating the need to enter a ZIP Code.

A bit simpler is an application from Geoworks Corp., an Emeryville, Calif.,
company that hasn't had much success designing hand-held operating
systems and is now focusing on offering special Internet applications for
mobile devices. In June, the company launched DiscPro (short for
"discounts and promotions to go"), a free service that sends messages to
pagers or mobile phones alerting consumers to deals at retailers that have
signed up to participate in the service. To redeem the offers, consumers
call a special number and give a special code to the retailer or visit a Web
site. Participating merchants include software retailer Egghead.com Inc.,
clothing retailer J. Crew Group Inc., and T.G.I. Fridays, the restaurant
chain owned by Carlson Cos.

Geoworks won't disclose how many people have signed up for DiscPro,
but it says several large wireless carriers, including Sprint PCS and
Dallas-based paging-service provider Paging Network Inc., are offering
the service.

In terms of content, DiscPro might seem somewhat far afield from the type
of service other wireless-device entrepreneurs are rolling out, but it's that
sort of information that could draw new users of Internet-enabled mobile
devices. And it points the way toward the kind of applications people may
want when such devices become more commonplace.

After all, says Mohan Vishwanath, vice president of Yahoo's Yahoo
Everywhere wireless unit, mobile Internet use may now be largely the
domain of road warriors sending e-mail messages, but who knows what
new groups -- such as teenagers -- are going to want to do online on the
go?

"E-mail is turning out to be the most common application of wireless data"
for the moment, he says, but he adds that "many things are changing very,
very quickly."

-- Ms. Bransten is a staff reporter of The Wall Street Journal
Interactive Edition in San Francisco.




To: JohnG who wrote (41926)9/20/1999 12:03:00 PM
From: Ruffian  Read Replies (1) | Respond to of 152472
 
Window Of The Future, WSJ>

September 20, 1999

Window in the Future

Bob Muglia is the man in charge of preparing Microsoft for
the wireless battles

By DAVID BANK

As senior vice president of Microsoft Corp.'s business-productivity group,
Bob Muglia talks a lot about using wireless devices and smart software to
provide "solutions" for on-the-go professionals.

But as a busy professional himself, he also has lots of experience with the
problems.

Recently, a minor emergency kept Mr. Muglia stuck in downtown Seattle
just when he needed to see an e-mail message to prepare for an important
business call. He searched a dozen pay phones before finding a data port
where he could plug in his palm-size computer. He wrangled with the
dialing procedures, connected, then downloaded hundreds of messages
from his office e-mail system just to get the one he wanted into his
hand-held device. Finally, he was ready for his call.

"The fact that I have to synchronize at 56k [kilobits
per second] is a terrible thing," says Mr. Muglia. "It
would be much better to have a wireless
connection to keep me synched all the time."

Mr. Muglia is in charge of easing such frustrations
for his fellow "knowledge workers" -- the analysts,
traders, administrators, sales representatives and
others who make up the bulk of the
information-economy work force. Along the way,
he should help Microsoft gain ground in a market
where it has long trailed badly.

Digital "personal companions" based on Microsoft's Windows CE
operating system had only 14% of the market last year, compared with
73% for devices from 3Com Corp.'s Palm Computing division, according
to International Data Corp., a Framingham, Mass., market-research firm.
This year, IDC predicts, Microsoft will fall even further behind, with less
than 13% to Palm's 80%.

In the nascent market for operating systems for a new breed of "smart"
cellular phones that integrate data capabilities, IDC expects Microsoft to
continue trailing both Palm and the Symbian consortium, backed by
Motorola Inc., Nokia Corp., Telefon AB L.M. Ericsson and other major
cellular-equipment manufacturers.

Demand for Access

But Mr. Muglia hopes to solve Microsoft's problems by solving his own.
He says knowledge workers want access to the same e-mail and calendar
systems they use at work through easier, faster, wireless connections.

Though Microsoft has promised such features, few are available yet. But
the company is betting that as increased wireless bandwidth and
microprocessor speeds become available, and the market for wireless data
devices takes off, the Windows CE products will become all the more
attractive.

"If things don't change, we don't win," says Jonathan Roberts, marketing
chief for Microsoft's wireless efforts. "It's very difficult to displace a market
leader if you don't change the rules. The only way to win is to bet on
shifts."

For their part, executives at Palm Computing expect Microsoft's efforts to
intensify, but they say they are ready for the onslaught. "They're a great
motivator," says Mark Bercow, Palm's vice president of strategic alliances
and platform development. "They argue that the way to take leadership is
to change the rules. Well, we're going to change our own rules."

Mr. Muglia, 39 years old, came to have responsibility for Microsoft's
wireless strategy almost by accident. The 11-year Microsoft veteran was a
driving force behind the March reorganization that aligned Microsoft along
customer, rather than technology, lines. As head of the
business-productivity group targeted at knowledge workers, Mr. Muglia
was given responsibility for Office, Microsoft's best-selling suite of desktop
applications, and Exchange, the e-mail and collaboration software that is in
head-to-head competition with the Notes software from International
Business Machines Corp.'s Lotus Development unit. The two software
systems have become increasingly integrated, with Office becoming a
universal "front end" for users, and Exchange handling much of the "back
end" processing.

The group didn't originally include Windows CE, an operating system
Microsoft is pushing for use in television set-top boxes, hand-held devices
(in Microsoft parlance, mini-laptops with mini-keyboards) and palm-size
devices (those that use a stylus for input). Microsoft executives at first
thought it made more sense to house Windows CE in the same group
developing new versions of Windows 98, Microsoft's operating system for
consumer PCs. "From a technology perspective, the link between
Exchange and Windows CE is basically zero," Mr. Muglia says.

But Mr. Muglia argued that from Microsoft's new customer point of view,
users of Exchange and users of palm-size PCs are one and the same. "It's a
potential base of customers who likely have a desire to get at their data,"
he says. "We figured out that the breakthrough applications were going to
come from these mobile scenarios."

Two-Part Strategy

Thus, Microsoft has a two-part strategy to leapfrog ahead of Palm. First, it
hopes to take advantage of increasing microprocessor speeds and
decreasing electric power consumption to offer more devices with fuller
features -- more memory, plus better screen displays, sound and color.
For example, some Windows CE devices can play digital music
downloaded from the Internet and display color photographs transferred
from PCs. That gives Microsoft's devices more bulk and less battery life
than Palm's.

"Today that's a bit of a disadvantage," Mr. Muglia says. "But it's on the
right side of the curve in terms of Moore's Law," the precept that, for the
same price, microprocessor power doubles approximately every 18
months.

Similarly, most early "smart" phones will include only a microbrowser to
retrieve data from the Web or corporate intranets. But Microsoft is betting
that as bandwidth increases and screens improve, users will want
full-featured e-mail and calendar features.

"The more you do sophisticated solutions, the greater our advantage is,"
Mr. Roberts says.

Second, Microsoft intends to exploit the success of Exchange and its other
back-end server software systems to help boost the sales of Windows CE
devices. For such users, "synchronization" with a back-end server such as
Exchange -- eliminating the need, say, to delete an old e-mail from both the
hand-held device and the PC back at the office -- will become a key
feature, Mr. Muglia says.

To back up its strategy, Microsoft has done a variety of deals to link
Exchange with wireless devices. Last year, it formed Wireless Knowledge,
a joint venture with Qualcomm Inc., which is expected to launch its
service for telecommunications carriers next year. In May, Microsoft
acquired Sendit AB, a maker of software that sends data to cell phones
based on Europe's wireless standard, global system for mobile
communications, or GSM. Microsoft also has an alliance with British
Telecommunications PLC to develop wireless data services abroad.

"Microsoft with Windows CE is very willing to invest, and they have the
profit stream to support it," says Michael Kwatinetz, an analyst with Credit
Suisse First Boston in New York. "The question is whether 3Com will be
able to make the same kind of investments in Palm."

Palm's Mr. Bercow says Palm is responding aggressively to every
challenge. He says Palm's fast, compact applications give it an advantage
over Microsoft's slower, bulkier software, even if Palm does not yet offer
features such as color screens and audio. "It's not about being able to do
e-mail, listen to MP3 audio and play multi-user games all at the same time
while riding in a taxicab in New York City," he says.

Instead, he says, the battle will be won by the company that best addresses
specific challenges, such as inventory management, sales-force automation
and expense reporting. Palm has announced a slew of partnerships with
companies creating such systems on its platform. "These are solutions that
have been created by vendors who are managing the corporate data," he
says.

And while the first generations of the company's devices were designed to
synchronize with desktop computers, not back-end servers, Mr. Bercow
says the company's alliances with companies that manage back-end data,
such as SAP AG, Oracle Corp. and IBM, give it the ability to deliver
corporate data, including that stored on Exchange servers from Microsoft.

The company's new Palm VII device, which includes a wireless connection
to the Palm.net network, doesn't yet deliver e-mail from corporate
systems. But, says Mr. Bercow: "I acknowledge that's an issue, and we're
addressing it."

Mr. Muglia also concedes that Microsoft must play catch-up to Palm. "In
every way, they are ahead of us," he says.

But, he adds, Microsoft will eventually triumph because of its ability to
increasingly link its software for mobile devices with its systems for
desktop computers and back-end servers.

"The underlying theme is one of integration," he says. "But while technical
integration is valuable, customer integration is more valuable. There's an
overall integration that's necessary between the device and the person."

-- Mr. Bank is a staff reporter in The Wall Street Journal's San
Francisco bureau.