By Caroline Humer and Reed Stevenson

NEW YORK/SEATTLE: Microsoft Chairman Bill Gates threw the marketing muscle of the software giant behind its new Tablet PC, staking his reputation on the bid to bring pen-based computing to the masses after a decade of false starts.

Gates vowed that the new slim, notebook-style computers, which Microsoft Corp. spent $400 million to develop, would not suffer the same fate as previous, failed industry efforts to marry the pen to the computer. "In my current role as Chief Software Architect, this is probably the one project I've spent the most of my time on," Gates told Reuters. "I've been involved in our commitment to this for over 10 years."

Microsoft's early attempts to get pen-based computing off the ground failed, and Apple Computer Corp.'s Newton, the precursor to current handheld computers, was also a commercial flop, though one that was hailed as visionary. "Looking back, we can say the hardware and the software weren't there. This time it really is ready for prime time," he told analysts, technology vendors and reporters in New York.

The tablet PCs, which run a new version of the Windows XP software platform, are targeted at people on the go, mainly office workers rushing from one meeting to another who need to take notes while using e-mail, presentations and documents.

Analysts were more cautious about whether gadgets would catch on, saying that the Tablet PC's success would depend on whether it would gain traction outside of the market for office workers and professionals, such as doctors and lawyers.

"Are people dissatisfied with notebooks?" asked Matt Rosoff, an analyst at Directions on Microsoft, an independent researcher, "Is there a burning need to be making annotations on something other than a piece of paper?"

Applications key

The new technology is making its entry at a time when a weak economy and sluggish corporate spending have driven personal computer sales lower for nearly two years. Along with the 13 PC makers, including No. 2 PC maker Hewlett-Packard Co., Taiwan's Acer Inc. and Japan's NEC Corp., Microsoft is hoping that new computing products will help revitalize the market.

Microsoft said it expected 500,000 to 1 million Tablet PCs to be sold over the next year. "I think if you go out five years from now, and look at portable computers, virtually all of those will have this tablet capability," Gates said.

Their success, analysts said, will depend on the software applications that are created to take advantage of the Tablet PC's pen and portability. "We really won't see an impact until there's more software," said David Smith, analyst at the Gartner Group.

Microsoft has developed a specialized add-on to its Office document, spreadsheet and presentation software for the Tablet PC, and Gates said that he would announce a new product related to the Tablet PC at his Comdex keynote speech on Nov. 17.

The new notebooks and software are designed to recognize users' writing in their own hand, without having to follow a special template. The TabletPC software can save entries as entered, or can translate cursive handwriting into typed text.

Tablet PCs, available today, cost between $1,700 and $2,400, depending on their features, such as their size, screens and ability to connect to networks wireless. On a down day for stocks, Microsoft stock closed 1.8 percent lower at $56.01 on the Nasdaq, while Hewlett-Packard was off 4.5 percent at $16.72 on the NYSE.

© Reuters