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Technology Stocks : 3Com Corporation (COMS) -- Ignore unavailable to you. Want to Upgrade?

To: joe who wrote (15843)	5/19/1998 2:36:00 PM
From: Mang Cheng	Respond to of 45548

Execerpt from today's stree.com about pp: "This isn't the first time Microsoft has challenged Palm Computing. At Comdex in 1996, Microsoft made a big deal about its new Windows CE operating system, which was touted as a PalmPilot killer even then. But the hype was overblown, and Microsoft's hardware partners shipped only slow, expensive clamshell devices, not speedy hand-held devices like the Pilot. The CE sold fewer than 500,000 units, a quarter of the Pilot's sales. So now Microsoft is mounting a second offensive with CE 2.0 and hardware partners which for the first time will ship palm-sized computers that compete directly with the PalmPilot. Does this sound familiar? Microsoft mimics another company's product and licenses it to all comers. Hmmm, sure worked in the personal computer world. But, analysts say, the Windows interface is not what consumers need on a palm-sized device, the CE devices are at least a generation behind the PalmPilot and the high memory and processor requirements of Windows mean CE manufacturers will not be able to drop prices as quickly as the PalmPilot should a price war break out. "The Windows user interface of CE with the Start button and all the scroll bars is a very top heavy user interface," McGuire said. "Is that something people will be willing to pay for at retail? I question that." And if Everex's forthcoming Freestyle is any indication, the CE devices will also be clunkier and heavier than their PalmPilot counterparts. The CE devices lag their PalmPilot brethern in several other ways too, including -- surprisingly -- coordination with Windows PCs. You'd think that the CE devices would be able to exchange data with any Windows desktop application, but in fact, the only one they work with thus far is Microsoft's own Outlook PIM. In this marketplace, the only way Microsoft is leveraging its dominance on the desktop is by offering a free copy of Windows 98 to anyone who buys a CE palmtop. Meanwhile, true to character, Palm Computing plans to stay ahead by keeping the PalmPilot small and simple. In the next year or so, the company will ship slimmer models and possibly a card-sized device, Colligan and analysts said. Palm will leave extras such as wireless networking and paging to its partners. That strategy should keep Palm Computing in the lead for the next 12 to 18 months, said Martin Mortensen, an analyst with Gartner Group of Stamford, Conn. But after that, all bets are off. As growth slows on the desktop, the future of Microsoft will depend on its ability to dominate the extreme low end and high end of computing, represented on the one hand by consumer products like hand-held devices and set-top boxes and on the other by the glass-house data center that NT is targeting. At the CE Developers Conference in San Jose last month, Microsoft Vice President Paul Maritz publicly acknowledged that CE is every bit as important to Microsoft as NT. That means Microsoft cares. And if history is any lesson, when Microsoft cares, Microsoft wins. The company has deeper pockets than 3Com and can afford to spend its way to success, whatever it takes. "Microsoft is prepared to pay a premium price to be in this space," Mortensen said. "At some point, they're going to hit the nail on the head." Colligan seemed to agree. "Microsoft is getting closer. They are a relentless company that will keep iterating until they figure it out." Mang